East Africa

Using radio to builds herders’ trust in livestock insurance in Isiolo County

The Kenya Livestock Insurance Program (KLIP) insures the livestock of pastoralists in the arid and semi-arid counties of Kenya. Implemented with technical assistance from the International Livestock Research Institute (ILRI), KLIP limits livestock losses through early compensation allowing pastoralists to protect their assets. Payouts are pegged to measurements of forage conditions made via satellite data on vegetation cover to derive an index of seasonal forage availability/scarcity. Once payouts are triggered, registered pastoralists in the affected areas are eligible for compensation.

Read this post by the Thompson Reuters Foundation on how radio is being used to build pastoralists’ trust in livestock insurance in Kenya’s Isiolo County.


Enhancing access to information for women in pastoral areas

A recent CTA workshop on ‘making next-generation ACP agriculture work for women’ identified seven critical success factors to enable women to truly benefit from agriculture: access by women to investment and finance, access to markets, skills support, networking and capacity development, access to information, knowledge and technology, access to land, overcoming socio-cultural factors, and appropriate recognition of women (in society, in policies, through targeted delivery of services).

A story from the workshop by Rupsha Banerjee argues that the current revolution in information access offers opportunities to transform and extend opportunities for women pastoralists in East Africa – enhancing their livelihoods and resilience. She calls for a ‘blended’ approach combining use of mobile phones, radio, and face-to-face communication, informed by a thorough understanding of the capacities of women and the institutions who work with them, building on local and community-based institutions, providing incentives for good quality data, and engaging local governments.

Read the full story

Watch an interview with Rupsha:

The Kenya Government declares a pay out of Ksh87 million to cushion 6,000 pastoralists from the effects of drought

The Government of Kenya, through the State Department of Livestock has announced a payout of Ksh87 million for pastoralists insured under the Kenya Livestock Insurance Program (KLIP).

Speaking at a press conference on 7 March 2019 where he declared payouts for the short-rains season (October–December 2018), the cabinet secretary for Agriculture Livestock Fisheries and Irrigation, Hon. Mwangi Kiunjuri reiterated the Government of Kenya’s commitment towards provision of agricultural insurance targeting crop and livestock farmers across the country.

‘I wish to announce that a total of Ksh87 million will be paid out to 6,000 pastoralists from 22 insurance units in eight counties of Marsabit, Turkana, Wajir, Isiolo, Mandera, Tana River, Garissa and Samburu. These are the areas, which were severely affected by drought during the short-rains season of October–December 2018, said Hon. Kiunjuri. ‘The insurance payout is intended to provide resources for the purchase of animal feeds, provide water, procure animal health care services or even move the animals to areas with better forage to cushion them against severe starvation and possible deaths.’

Beneficiary of Takaful insurance payout in Wajir, northern Kenya

Shamsa Kosar, a beneficiary of  a previous payout by Takaful insurance in Wajir, northern Kenya (photo credit: ILRI/Riccardo Gangale).

KLIP is a satellite-based index insurance product, whose aim is to cushion smallholder pastoralists against drought-related loss of their key productive asset, livestock. Payments are based on measurements of forage conditions made via satellite for each area. Low cost, accessible and reliable satellite-based indicators of pasture availability act as triggers for indemnities to pastoralists incase a strong forage deficit is indicated over a defined period and geographical location. The program is therefore an asset protection contract whose payouts are designed to trigger in-between the end of a poor rainy season and at the beginning of a dry season, thus enabling pastoralists to use the cash received to purchase fodder, water, veterinary drugs and allied services that would help keep their livestock alive during the drought period.

There are currently 18,000 pastoralists’ households insured through KLIP. These households are distributed in the eight counties of implementation;  Isiolo, Marsabit, Wajir, Garissa, Tana River, Turkana, Samburu and Mandera. KLIP was launched in 2014 as a pilot program in Wajir and Turkana counties where 5,000 households were covered, with over 25,000 Tropical Livestock Units (TLU) covered across the two counties (1 TLU is equivalent to 1 cow). Over the last four years KLIP has expanded to cover six additional counties, bringing the total number of households under cover to 18,000 and the TLUs covered to over 70,000. Private insurance companies have been the underwriters of the KLIP product since inception, and for this payout Takaful Insurance of Africa is the lead underwriter.

Watering camels near Wajir, northern Kenya

Camels at a water point near Wajir (photo credit: ILRI/Riccardo Gangale).

Livestock is a major contributor to Kenya’s economy, providing about 42% of the agricultural GDP and 12% of the national GDP. It is for this reason that mainstreaming livestock production is provided for under Sessional Paper No. 2 of 2008 on the National Livestock Policy as well as the Agriculture Sector Transformation and Growth Strategy, 2010-2022 and the overarching Vision 2030. In his speech, the cabinet secretary highlighted that, ‘these guiding policy frameworks provide the necessary strategic thrust to ensure that the livestock subsector makes its rightful contribution to the economic development of Kenya. Further, the current Medium-Term Plan (2018-2022) and the government policy on agricultural risk management recognizes the important role insurance instruments will play in cushioning pastoralists from the effects of drought’.

He also stated that considering the sustainability of the program, plans are underway by the government to start a partial voluntary cover, where the government will provide one extra cover for every cover bought from the voluntary market. County governments were requested to set aside funds to complement the efforts of the national government of cushioning vulnerable members of the society from extreme shocks resulting from drought. The cabinet secretary also encouraged insurance companies to carry out voluntary insurance sales in order to enhance sustainability of the insurance product.

While there have been targeted efforts to bring KLIP to sustainable scale in Kenya through collaboration with public and private sector actors and development partners, the International Livestock Research Institute (ILRI) and the World Bank who have been spearheading research and technical support in its implementation are now faced with growing demand for replication and scale up of similar approaches from countries within the Horn of Africa. Ethiopia for instance is at the formative stages of setting up a taskforce to look into the feasibility of a national livestock insurance scheme – similar to KLIP, to which ILRI is a member.

A feasibility study led by the World Bank and ILRI is currently underway in Somalia with the aim of advising the Federal Government of Somalia on the possible approaches and benefits of setting up an index-based livestock insurance scheme. In –­Niger, West Africa, a feasibility study was also conducted by ILRI and partners (Cornell University and CARE international) in 2018, to determine the operational, financial and social-economic viability of launching a product like KLIP in the region.

Despite this demand, the general experience gained over the years of implementing index-based livestock insurance (IBLI) indicates that emphasis should always be directed towards getting the science right with regards to contract design, identifying, incentivizing and sustaining the right public and private sector partners, creating awareness as well as building local capacity in order to implement IBLI successfully.

Written by Duncan Khalai with contributions from Sarah Kasyoka.

Read a related business daily article.


Why women are among the best clients for livestock insurance in East Africa

A recent CTA workshop on ‘making next-generation ACP agriculture work for women’ identified seven critical success factors to enable women to truly benefit from agriculture: access by women to investment and finance, access to markets, skills support, networking and capacity development, access to information, knowledge and technology, access to land, overcoming socio-cultural factors, and appropriate recognition of women (in society, in policies, through targeted delivery of services).

A story from the workshop by Rupsha Banerjee, Eric Mwaura and Sabdiyo Dido asks why women pastoralists in East Africa – who are not usually significant livestock owners – are major customers for IBLI’s livestock insurance product. Reasons suggested include that women’s access to micro-loans enables them to access a financial service such as IBLI,  women do own small ruminants so have an interest in insurance, and increasing sedentarisation of the pastoral community which means that women are becoming household decision-makers.

As initiatives such as IBLI are being scaled out across East Africa, it is essential to develop a deeper understanding of the factors that motivate livestock owners – both women and men – to invest in such insurance.

Read the full story

Watch an interview with Rupsha:

On the road to salvaging livestock market data: Digitizing livestock market data from Kenya’s arid and semi-arid regions

By Kevin Kidimu,
Research Associate, International Livestock Research Institute

Since independence, Kenya has grappled with collection of livestock market data. The livestock production department was established in 1987 and since then, the ministries of agriculture and livestock have been split and merged several times, negatively impacting the livestock subsector. The creation and dissolution of ministries has come with a change in priorities, which has resulted in glaring gaps in collection of livestock market information. Access to information on livestock prices, volumes traded at markets, breeds, sex and age group of animals, has been hampered.

Previous efforts to close these information gaps have not borne fruit due to intermittent funding from the National Treasury. Recurrent droughts in the recent past have compelled government and development partners to embark on efforts to boost resilience of pastoral communities to secure their livelihoods. To achieve this goal, it is important to have information that will help producers make better choices in livestock trade. This need has led the State Department of Livestock, through the World Bank’s Regional Pastoral Livelihoods Resilience Project (RPLRP), to revive data collection across livestock markets in pastoral and agropastoral counties of Kenya. Despite this effort, there have been challenges in collecting raw data. The State Department of Livestock (SDL) has now partnered with the International Livestock Research Institute (ILRI) to salvage livestock market data that has been collected over the years but is not available in the SDL database.

Continue reading this article in the Innovate Digest.

It’s all systems go for the scaling up of index-based livestock insurance in Ethiopia

For close to a decade, the International Livestock Research Institute (ILRI) and its partners in the public, private and non-profit sectors have been engaged in designing and implementing index-based livestock insurance (IBLI) to protect livestock keepers from drought related asset losses. Introduced in Ethiopia in 2012, the conversation on IBLI is gaining momentum with more stakeholders investing in efforts towards its delivery, as well as the provision of other related agricultural index insurance products. 

The value of IBLI has been demonstrated, for instance, by record payouts to insured pastoralists in Borana during the 2017 droughts and by the increased coverage of projects around crop-based index insurance. Based on this, the time was deemed ripe to convene a structured, purposeful conversation around catalysing a sustainable scale of IBLI and agricultural index insurance in Ethiopia.

On 10 July 2018, ILRI’s IBLI team with support from the Technical Centre for Agricultural and Rural Cooperation ACP-EU (CTA) delivered a policy workshop, at the ILRI campus in Addis Ababa, that brought together key government policy and decision makers, researchers, private sector and development partners’ representatives to share experiences on agricultural insurance. More specifically, the purpose of this policy dialogue was to outline a concrete process towards the effective widespread provision of index-based livestock insurance, and more broadly agriculture insurance in Ethiopia.

Participants at the policy dialogue on scaling IBLI in Ethiopia_11th July 2018 Bethlehem Alemu

Participants of the policy dialogue workshop on scaling IBLI in Ethiopia (photo credit: ILRI/Bethlehem Alemu).

Prof. Fekadu Gebre, state minister, Ministry of Agriculture and Livestock Development in Ethiopia was present at the meeting. His presence at the policy dialogue spoke not only to the criticality of the discussion on livestock insurance, but also to the commitment of the Ethiopian government to identify effective strategies for helping livestock herders and farmers manage the risks of drought. In his address to the participants, he highlighted the government’s recognition that IBLI is targeting one of the critical limiting factors faced by pastoralists—drought-related livestock mortality. He also noted that insurance can allow government to proactively and more cost-efficiently respond to severe drought risks and stated that the conversation on micro insurance in Ethiopia is timely. 

Various in-depth presentations from ILRI researchers, CTA, government and the private sector highlighted the extent of drought-related losses and the impact of such losses on pastoralists and their governments. Presentations and discussions also affirmed agricultural insurance and specifically livestock insurance, as an effective and cost-efficient tool for enhancing pastoralists’ resilience to drought. Participants delved into the specific experiences of the Index-based Livestock Insurance Program and strategic lessons related to supporting its sustainable scale. Experiences from the Kenya Livestock Insurance Program were presented as was the IBLI program in Ethiopia. As the policy dialogue was also aimed at capturing perspectives and identifying synergies for scale from a range of crop insurance pilots, representatives from the Oromia Insurance Company, Nyala Insurance, the Agricultural Transformation Agency and the United Nations World Food Programme also presented their lessons and experiences on weather index and micro insurance focusing on motivation, progress, trends and challenges of index-insurance in Ethiopia.

Participants at the livestock insurance policy diaogue in Addis Ababa Prof. Fekadu state minister, Ministry of Livestock and Agriculture, Ethiopia at the livestock insurance policy diaogue in Addis Ababa

Participants (left) and Prof. Fekadu Gebre, state minister, Ministry of Agriculture and Livestock Development in Ethiopia (right), at the policy dialogue workshop (photos credit: ILRI/Sarah Kasyoka).

An expertly facilitated conversation ensured that participants engaged in productive and insightful conversations, uncovering critical issues for consideration around the value and challenges of scaling index-insurance in Ethiopia. Insights from the sessions emphasized the critical role of an enabling policy and regulatory environment in facilitating uptake of index insurance in Ethiopia. There was also agreement across the board that insurance needs to be bundled with other services such as micro-credit to increase uptake. The place of information and communication technology was also recognized as key in making insurance services available for smallholder producers and pastoralists. Leveraging technology was highlighted as a critical factor in minimizing the cost of delivering insurance products through; efficient beneficiary registration, digital sales services, insurance payouts (mobile money transfers), and information dissemination. 

Panel discussions allowed participants to delve deeper into issues pertinent to the scaling up of index-based livestock insurance in Ethiopia and establishing a concrete way forward. Key recommendations to this effect were articulated, among them being the need to establish a process under an empowered authority to define specific needs, outline actions and coordinate efforts to establish a sustainable agricultural index insurance program in Ethiopia. The national government (Ministry of Agriculture and Livestock Development) was unanimously identified as best-placed to host such a process and offer leadership for the development and scaling up of crop and livestock insurance programs in the country. There was also firm commitment expressed by all partners including the government, CTA, ILRI, and private insurance companies to deploy efforts and resources to move the process of scaling up index insurance in Ethiopia forward.

It is envisioned that all stakeholders will now engage in concrete action to begin to implement the key recommendations reached, to continue to achieve impact for smallholder farmers and herders.

The workshop was sponsored by CTA through its Climate and Markets East Africa (C-LI-MARK) Program as part of CTA’s broader support to the sustainable scale of index-based livestock insurance initiatives in partnership with ILRI, the Oromia Insurance Company and Takaful Insurance of Africa.

A Business Evaluation of the Sales and Distribution Model for Index-Based Livestock Insurance

“Developing the insurance product was the easy part. The tweaking, monitoring, and adapting – that has been much more complicated.” This, in essence, was what Cornell development economist Christopher Barrett informed us as we began discussing our upcoming Kenya research trip with him.

He was right. Since the International Livestock Research Institute (ILRI) formulated Index-Based Livestock Insurance (IBLI) ten years ago, the product has been lauded as a strategy to prevent drought-induced livestock losses among Kenyan and Ethiopian pastoralists. By combining satellite observations of forage conditions with longitudinal livestock mortality rates, it calculates clients’ seasonal payouts.

While by and large successful – and already showing evidence of positive impacts on pastoralists’ wellbeings – the rollout of IBLI has faced numerous challenges, as Takaful Insurance of Africa, IBLI’s current private sector partner, can attest.

Continue reading…

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