Vulnerability

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.

Towards a robust national livestock market information system: Stakeholders convene to chart way forward

Sustainable livestock systems

Stakeholders workshop on livestock market information systems Participants at the stakeholders’ workshop on livestock market information system held on 11 July 2017 in Naivasha, Kenya (photo credit: ILRI/Dorine Odongo)

Access to accurate and timely market information among pastoralist livestock producers and market actors is a perennial concern, even more so following the immense emphasis and efforts placed on improving livestock production in drylands. Livestock production being the major (and in most cases the only) source of livelihoods for communities in the drylands of Kenya, the need to address the full continuum of livestock production from breeding all the way to market access cannot be overemphasized.

Consequently, many attempts are being made by different stakeholders —both governmental and non-governmental actors— to collect real time market information. For example, the livestock component of the USAID Feed the Future Kenya Accelerated Value Chain Development project (AVCD) which seeks to increase income from sales of livestock focuses on enhancing…

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Record payouts being made by Kenya Government and insurers to protect herders facing historic drought

ILRI news

klip_cropped02From left to right: Jimmy Smith, director general of the International Livestock Research Institute (ILRI); Andrew Tuimur, principal secretary in Kenya’s State Department of Livestock; and Willy Bett, cabinet secretary for the Kenya Ministry of Agriculture, Livestock and Fisheries during a press conference held on 20 Feb 2017 announcing payments to more than 12,000 pastoral households under the Kenya Livestock Insurance Program (KLIP) (photo credit: ILRI/Dorine Odongo).

More than Ksh214 million is on tap for 12,000 pastoral households in six counties of northern Kenya through innovative policies that use satellite imagery to trigger payments for feed, veterinary supplies and water.

As an epic drought desiccates fields and forages in the Horn of Africa, Government of Kenya officials, in partnership with Kenyan insurers, today announced payments to over 12,000 pastoral households under a breakthrough livestock insurance plan—one that uses satellites to monitor vegetation available to livestock and triggers assistance for feed, veterinary medicines and even…

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Kenya lost USD 12 billion to drought in three years

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Kenya’s economy lost an estimated Ksh 1.2 trillion (USD 12 billion) due to the effects of drought between 2008 and 2011.

According to an article in Kenya’s Standard (28 April 2016)more than 13 million people were affected in 2011 by a combination of drought, conflict and economic crisis.

The article quoted International Livestock Research Institute (ILRI) research (in the 2014-2015 corporate report), which estimates that of the Sh1.2 trillion loss, 27% of it, or USD 3.3 billion (Ksh 337 billion), occurred in the livestock sector. This is slightly over 20% of the country’s gross domestic product (GDP), or the total value of goods produced by the country.

These and other impacts of drought were discussed at the sixth Intergovernmental Authority on Development (IGAD) Drought Disaster Resilience and Sustainability Initiative, which was launched by Mwangi Kiunjuri, the cabinet secretary for devolution in Kenya in April 2016. He said that besides the immense human suffering caused by drought, the economic cost of drought is also enormous.

Ambassador Mahboub Maalim, the chairperson of IGAD, noted that as a result of some resilient initiatives put in place by Kenya, such as the Index-Based Livestock Insurance, the country for the first time was able to deal with drought without seeking international aid.

Read the whole story Kenya lost Sh1.2tr to drought in 3 years.

Index Based Livestock Insurance (IBLI), E-learning Course Launch

Elearning launchAre you interested in knowing just how Index Based Livestock Insurance works? Lessons on IBLI and the Asset Protection Contract are now just a click away! You can easily access your IBLI lessons from ILRI’s e-Learning portal http://learning.ilri.org/.  The IBLI e-Learning course was launched on the 22nd of March 2016 at the International Livestock Research Institute’s (ILRI) campus in Nairobi, Kenya. Various stakeholders including Kenya Government officials from the State Department of Livestock (SDL), insurance companies, donor organizations and partner NGOs attended the launch ceremony. In his opening remarks, ILRI’s Director General Dr. Jimmy Smith reiterated the fact that Capacity Development is a critical success factor for ILRI and that stakeholders must focus on enhancing pastoralism as it is a major contributor to the national Gross Domestic Product.

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IBLI and Oromia Insurance Company introduce insurance scheme for pastoralists in Southern Ethiopia

Oromia Insurance Company has introduced a new service using satellite data to insure pastoralists in Southern Ethiopia by using Index Based Livestock Insurance (IBLI).

According to OIC, for the first time, the insurance company has paid more than half a million birr to Borana pastoralists insured by IBLI.

OIC, one of the private insurance companies in Ethiopia, embarked upon the IBLI in August 2012 and has been underwriting this product in ten pastoral woredas of the Borana Zone, Oromia Regional State.

According to a statement OIC sent to The Reporter, in 2014, OIC sold 1,138 policies covering 2,563 head of livestock and it gives the insurance cover for cattle, camel and shoats (sheep and goat) for ETB 6,000, 10,000 and 800, respectively.

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Pastoralists in Kenya’s drought-stricken areas receive payouts for loss

By Fabian Mangera WAJIR (Xinhua) 

Some 101 Muslim pastoralists on Tuesday received 5,800 U.S. dollar compensation for drought- induced losses suffered in Wajir County of northern Kenya.

The pastoralists’ herds of sheep, goat, cattle and camels were insured in August 2013 by Takaful Insurance of Africa (TIA) with an Index-Based Livestock Insurance (IBLI) product, branded as Index-Based Livestock Takaful (IBLT)….

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