Jan 132014
 

Watch the following playlist of climate change films produced by the International Livestock Research Institute (ILRI).

These films describe how climate change is affecting millions of poor livestock herders and mixed crop-and-livestock farmers in Africa. Unpredictable and often extreme climatic events mean that overall, most of these livestock keepers struggle as droughts and floods devastate their increasingly fragile agricultural lands.

The first 8-minute film, ‘Heat, Rain and Livestock: Impact of climate change on Africa’s livestock herders’, shows how research-based interventions carried out by ILRI and its partners are helping livestock herders in northern Kenya cope with climate change.

Increasingly overcrowded lands and increasing competition for resources are contributing to more conflict between pastoral communities in many parts of Africa, but ‘scientific research, through projects such as ILRI’s Index-Based Livestock Insurance (IBLI) and a shift to raising animals that produce more (and more efficiently) and that are better adapted to climatic changes is making a difference.’

The second 4-minute film, ‘Climate, food and developing-country livestock farming’, describes many of the challenges experienced by small-scale livestock farmers in African countries, which remain under-appreciated by policymakers and the media in rich countries.

According to the ILRI film, ‘research can provide these farmers with the means to increase their production to meet growing demand for food in many countries while at the same time managing their environments.’

View the full climate change playlist on YouTube.

Read recent ILRI news articles on climate change:

Storming the ivory towers: Time for scientists to get out, ‘get social’, to learn better, faster–Nature commentary

Want ‘climate-smart’ farming adopted in Africa? Then better start collecting data on how much greenhouse gases African countries are emitting

Climate change–Wholesale reconfiguration of diets, livelihoods, farming will be required in some regions

Read research outputs from ILRI’s climate change research.

Aug 102013
 

Kenya: drought leaves dead and dying animals in northen Kenya

Kenya: dead and dying animals in previous drought in Arbajahan, in northern Kenya’s Wajir County (photo credit: Brendan Cox / Oxfam).

Today (Sat 10 Aug 2013), Takaful Insurance of Africa is launching a pilot project providing satellite date-based livestock insurance cover for pastoral livestock herders in the drought-prone drylands of northern Kenya’s Wajir County.

The Takaful Livestock cover will provide livestock keepers in the county with covers against livestock deaths resulting from shortage of fodder due to prolonged dry weather.

Those who subscribe to this insurance policy will receive payments if the forage available for their insured cattle, camels, sheep or goats falls below a given threshold, with assessment of the state of vegetative cover in the county determined by satellite data.

Takaful Insurance is partnering in this project with the International Livestock Research Institute (ILRI) and MercyCorps. ILRI, under the leadership of Andrew Mude, is providing the satellite data and MercyCorps is coordinating public awareness campaigns.

Among those who will be in attendance are:

  • Jimmy Smith, director general of ILRI
  • Andrew Mude, leader of ILRI’s Index-Based Livestock Insurance Project
  • Abdihafith Maalim, deputy governor of Wajir County
  • Liesbeth Zonnoveld, country director of Mercy Corps
  • Hassan Bashir, chief executive officer of Takaful Insurance of Africa

The launch of this new livestock insurance scheme, the first ever provided in this county, begins at 12 noon at the Wajir Guest House in Wajir town.

About Takaful Insurance of Africa
Founded in 2008 and licensed in Mar 2011 by the Insurance Regulatory Authority (IRA), Takaful Insurance of Africa Limited (TIA) is pioneering an ethical approach to insurance in Kenya and the region based on the Shariah principles of togetherness, cooperation and mutual solidarity. Each participant contributes a given premium, which is pooled in a general fund managed by TIA on behalf of the members. Through the principle of Tabarru’, or donation, members allow the company to pay any loses suffered by participants contributing to the pool, while any surplus left from the pooled funds after payment of claims and other expenses is either used to grow the reserves or is distributed among members.

About ILRI
The International Livestock Research Institute (ILRI) ILRI is a not-for-profit institution with a staff of about 600 and, in 2012, an operating budget of about USD 60 million. A member of the CGIAR Consortium working for a food-secure future, ILRI has its headquarters in Nairobi, Kenya, a principal campus in Addis Ababa, Ethiopia, and offices in other countries in East, West and Southern Africa and in South, Southeast and East Asia. ILRI works with partners worldwide to enhance the roles that livestock play in food security and poverty alleviation, principally in Africa and Asia. The outcomes of these research partnerships help people in developing countries keep their farm animals alive and productive, increase and sustain their livestock and farm productivity, find profitable markets for their animal products, and reduce the risk of livestock-related diseases.

Read more about ILRI’s Index-Based Livestock Insurance Project

Index-Based Livestock Insurance Blog

ILRI Clippings Blog
Livestock keepers in Kenya’s northern Isiolo District to get livestock-drought insurance for first time, 30 Jul 2013

ILRI News Blog
‘Livestock insurance project an excellent example of innovative risk management in Kenya’s arid lands’ Kenyan minister, 10 Sep 2012
Options to enhance resilience in pastoral systems: The case for novel livestock insurance, 22 Feb 2012
Short films document first index-based livestock insurance for African herders, 26 Oct 2011
Livestock director and partners launch first-ever index-based livestock insurance payments in Africa, 25 Oct 2011
Herders in drought-stricken northern Kenya get first livestock insurance payments, 21 Oct 2011

Sep 102012
 

Kenya Rural Development Programme launch in Kiboko, Kenya

Marjaana Sall, deputy head of delegation of the European Union to Kenya, Jimmy Smith, director general of ILRI, Mohammed Elmi, Kenya’s minister of state for development of northern Kenya and other arid lands and Romano Kiome, permanent secretary in Kenya’s ministry of agriculture at the launch of the Kenya Rural Development Programme (KRDP) at the KARI centre in Kiboko, Makueni on 7 Sept 2012 (photo credit ILRI/Paul Karaimu).

Kenya’s minister of state for development of northern Kenya and other arid lands, Mohamed Elmi, has praised a livestock insurance project implemented in Kenya by the International Livestock Research Institute (ILRI) and other partners for its role in improving the productivity of the country’s drought-prone arid and semi-arid lands.

‘The index-based livestock insurance project in Marsabit District is an excellent example not just of innovative risk management, but of how, with thought and imagination, basic services such as insurance can be brought within reach of those previously excluded,’ said Elmi.

The minister was speaking last week (7 Sep 2012) at the launch of a five-year Kenya Rural Development Programme at the Kenya Agricultural Research Institute rangeland research station at Kiboko, located in Makueni County. Representatives from the Kenya government, the European Union and international research organizations, including ILRI, participated in the launch.

The Kenya Rural Development Programme is a new five-year agricultural support program funded by the European Union at 66 million euros. It is seeking to improve drought response and management and agricultural productivity in the country’s arid lands and to reduce the vulnerability of people living in these areas.

Jimmy Smith, the director general of ILRI, who attended the launch, said the index-based livestock insurance project is making rangelands-based livelihoods more sustainable.

‘Promoting food security and reducing poverty in arid areas is a key priority for the government. I’m delighted the minister highlighted the role IBLI is playing in this process; ILRI is committed to making an important contribution,’ said Smith.

The insurance project, which was piloted in Marsabit District, in northern Kenya, in 2010, is a component of the Kenya Rural Development Programme. The project is a result of collaborative efforts between ILRI, UAP Insurance, Cornell University and the Index Insurance Innovation Initiative, based at the University of California at Davis. A second phase of the project, which started in southern Ethiopia in August 2012, has received 1 million euros from the European Union.

‘The Kenya Rural Development Programme responds to the development needs of the rural people in Kenya and the support given by the European Union to the agricultural sector will improve the lives of people in the country,’ said Marjaana Sall, deputy head of delegation of the European Union to Kenya.

The event featured displays of European Union-funded activities in Kenya’s rangelands from the Kenya Rural Development Programme, the Kenya Agricultural Research Institute and ILRI, among other exhibitors, and was attended by local community members and farmers in Kiboko.

Read recent stories about index-based livestock insurance: http://www.ilri.org/ilrinews/index.php/archives/8149

Read more about the Kenya Rural Development Programme: http://www.dmikenya.or.ke/

May 012012
 

NP Kenya 211011_36

Herders who took out livestock insurance under the Index-Based Livestock Insurance Project in a 2011 meeting in Marsabit, Kenya. A new markets book highlights the role of the insurance scheme in helping farmers protect their assets (photo credit: Neil Palmer/CIAT).

A new book on markets development for African smallholder farmers has highlighted a pioneering livestock insurance project as a key innovation that could enable African farmers reduce their losses in crop and livestock production.

The new publication: Towards priority actions for market development for African farmers, says lowering production and efficiency losses in agricultural production and improving agricultural markets will, among other actions, ‘level the playing field for smallholder farmers’ and support human and economic development in Africa. The books calls for the ‘right mix’ of policy and investments to not only ‘strengthen African policy expertise’ but also encourage ‘a more diverse array of investments and initiatives, including those initiated by the private sector.’

One such initiative that brings together private and public sector actors to support African agriculture is an Index-Based Livestock Insurance project in Kenya. The project is featured in a chapter in the new book.

Started in 2010 by the International Livestock Research Institute (ILRI) in partnership with UAP insurance, Equity Bank, Cornell University and the Index Insurance Innovation Initiative program at the University of California at Davis, the Index-Based Livestock Insurance project provides livestock insurance against forage losses to over 2500 households in Kenya’s Marsabit District. Freely available satellite imagery is used to assess conditions of pastures. When pasture vegetation is reduced to a level below a specified threshold, the insurance company pays herders who bought insurance. Yearly premiums cost USD100 for 6-8 animals.

Pastoral livestock sectors are at the heart of agricultural markets in Africa. Kenya’s livestock industry, for example, is estimated to be worth about USD800 million per year and produces most of the meat consumed in the country and is critical to the country’s food security. Research by ILRI shows that long-term solutions to food security in Kenya and other countries in the Horn of Africa need to support livestock herding. Pastoral systems are critical for the survival of livelihoods here and offer the most efficient way of managing the region’s large arid and semi-arid lands.

This insurance scheme is currently being piloted in other parts of Kenya and in Ethiopia. In late 2011, 600 livestock keepers insured through the project received insurance payments for vegetation losses arising from the drought that struck the Horn that year. The project is also now making use of mobile phones to widen its impact in remote communities.

Notes:

The new book, which is published by ILRI and the Alliance for a Green Revolution in Africa (AGRA), warns that ‘it will not be enough to simply produce more food from the fields and grazing lands of Africa.’ More effort is needed to create better markets and improve access to these markets’ especially in remote regions.

The book describes the outcomes of an international conference held in Nairobi three years ago that examined the ‘priority actions’ that if taken could speed up the development of African agricultural markets.

Authors of the markets books recommend enhancing markets for poor people, improving market information, lowering transaction costs associated with trading and adding value to farm produce by upgrading value chains and processing mechanisms.

Read more about the book

http://www.ilri.org/ilrinews/index.php/archives/8786

http://marketopportunities.blogspot.com/2012/03/agra-and-ilri-publish-proceedings-of.html

Download the full book or different sections:

http://mahider.ilri.org/handle/10568/16491

Read recent stories on the Index-Based Livestock Insurance Project from ILRI news:

http://www.ilri.org/ilrinews/index.php/archives/8149

http://www.ilri.org/ilrinews/index.php/archives/7348

View short films about the project

http://www.ilri.org/ilrinews/index.php/archives/7374

 

 

 

Apr 292012
 

 

Causes of livestock deaths

Causes of livestock deaths, figure reproduced in ILRI-AGRA book: Towards priority actions for market development for African farmers: Proceedings of an international conference, Nairobi, Kenya,13-15 May 2009. Nairobi (Source of figure: J McPeak, PI Little and C Doss. 2010. Livelihoods in a Risky Environment: Development and Change among East African Pastoralists, Routledge Press, London.)

With food shortages being predicted for dryland communities in both East and West Africa this year, it seems an appropriate time to revisit a major way African experts see that the continent can feed itself: Get Africa’s markets working.

Three years ago, 150 of the world’s leading market experts gathered in Nairobi, Kenya, to document the best ways to drive agricultural market development in sub-Saharan Africa. Both the proceedings of this international conference, Towards Priority Actions for Market Development for African Farmers, held 13–15 May 2009, and a synthesis of its outcomes, Priority Actions for Developing African Agricultural Markets, were published last year by ILRI and the Alliance for a Green Revolution in Africa (AGRA).

The synthesis of this major African markets conference begins by referring to the sudden escalation in food costs that began in late 2010 and persisted into 2011—the second time in only three years that rapid food price rises, caused by a combination of production shortfalls and market failures causing dramatic gaps between supply and demand, rocked developing countries worldwide. With Africa’s long-term struggle with food insecurity, this continent and its economies and people are especially vulnerable to any sudden rise in food prices.

Even before the price shocks of 2008 and 2011, expert opinion had begun to coalesce on the centrality of agriculture in addressing African hunger and poverty. Much of the discussion has focused on increasing agricultural productivity through improved crop varieties and animal breeds, along with increased access to inputs and veterinary services, to boost farm yields. And, indeed, with crop and livestock yields on African farms typically a fraction of that in other regions, there appear to be big opportunities for new breadbaskets and milk sheds emerging across the continent.

But it will not be enough to simply produce more food from Africa’s fields and grazing lands. First, most Africans—including most smallholder, and even subsistence farmers—are net purchasers rather than growers of food.  Also, as more and more people migrate from rural to urban areas, more and more Africans are relying on markets to meet their food needs. And because most rural as well as urban Africans spend a significant proportion of their income on food, even modest increases in food prices can tip millions of them into poverty.

Efficient and vibrant agricultural markets would help. But Africa’s agricultural markets suffer from a dearth of processing and storage facilities, pricing information, smallholder credit, and transport. These create inefficiencies that both raise prices for consumers and restrict sales opportunities for farmers, who are stopped from selling their food surpluses in nearby food-deficit regions.

View or download the full proceedings of this international conference:
Towards Priority Actions for Market Development for African Farmers, 13–15 May 2009, published by ILRI and AGRA, 2011.

and a synthesis of the outcomes of the conference:
Priority Actions for Developing African Agricultural Marketspublished by ILRI and AGRA, 2011.

Five recommendations
The following five recommendations, highlighted here for their special pertinence to the drylands of East and West Africa, are presented in case studies published in the ILRI-AGRA markets book:
1 Support village seed trade in semi-arid areas
2 Manage pastoral risk with livestock insurance
3 Employ ICTs to raise smallholder income
4 Embrace informal agro-industry
5 Encourage intra-regional trade

Details of these recommendations follow.
1 Support village seed trade in semi-arid areas
Section 2 of the proceedings volume, Seed and Fertilizer Markets, includes a case study of the utility of Tapping the potential of village markets to supply seed in semi-arid Africa in Mali and Kenya. This paper, written by Melinda Smale, (Oxfam America), Latha Nagarajan, Lamissa Diakité, Patrick Audi (ICRISAT), Mikkel Grum (Bioversity International), Richard Jones (ICRISAT) and Eva Weltzien (ICRISAT), shows that village markets have the potential to supply high-quality pigeon pea and millet seed in semi-arid areas of Kenya and Mali, respectively.

The problem: Periods of seed insecurity occur in remote, semiarid areas when spatially covariate risk of drought is high and many farmers fall short of seed. In these remote environments, seed systems are typically informal, and farmers rely on each other for locally adapted varieties. They are not reliable clients for private seed companies because they purchase seed irregularly. Less improved germplasm has been developed for semiarid environments because of the high costs of breeding and supplying seed—a situation that has worsened with decreasing public funding for agricultural research. In the Mali study, village markets assure a supply of seed of identifiable, locally adapted, genetically diverse varieties as a final recourse in a risky environment where there are as yet no reliable formal channels, for which competitive varieties have not yet been bred, and the potential of agro-dealers to supply certified seed has not yet been exploited. In the Kenya study, well-adapted varieties have been bred, but no formalized channels of seed provision exist for pigeon pea and agro-dealers are active in selling improved varieties of maize and vegetables. In both studies, farm women are major seed trade actors. Interestingly, the characteristics of seed vendors and the locations of seed programs—not the price of seed—tend to determine the quantities of seed sold. The authors argue for strengthening and linking both formal and informal systems for non-hybrid dryland crops.

Some solutions: Several approaches piloted recently are potential candidates for improving the supply of good-quality seed on a large scale.

The West Africa Seed Alliance (WASA) and the Eastern and Southern Africa Seed Alliance (ESASA) work to help local entrepreneurs expand existing seed companies and create new ones.

Since private seed companies do not yet operate in the sorghum- and millet-based systems of the Sahel, where state agencies are underfunded, scientists at the International Crops Research Institute for the Semi-Arid Tropics (lCRISAT) have tested several models that draw on the comparative advantages of farmer organizations.

2 Manage pastoral risk with livestock insurance
Section 3 of the ILRI-AGRA markets proceedings, Strengthening Finance, Insurance and Market Information, has two case studies of particular relevance to the food problems facing the drylands of West and East Africa.

First is a report on Insuring against drought-related livestock mortality: Piloting index-based livestock insurance in northern Kenya, written by ILRI’s Andrew Mude and his partners Sommarat Chantarat, Christopher Barrett, Michael Carter, Munenobu Ikegami and John McPeak.

The problem: Climate extremities pose the greatest risks to agricultural production, with droughts and floods not only causing crop failures but also forage and water scarcity that harms and kills livestock. The number of droughts and floods has risen sharply worldwide in the last decade, with disaster incidence in low-income countries rising at twice the global rate. In much of rural Africa, where water harvesting, irrigation and other similar water management methods are under developed, the impacts of climate change are expected to be especially pernicious.

A solution: In the last several years, new ways to manage weather-related agricultural risk have been developed. Of these, index-based insurance products represent a promising and exciting market-based option for managing climate-related risks faced by poor and remote populations.

This paper describes research to design commercially viable index-based livestock insurance for pastoral populations of northern dryland Kenya, where the risk of drought and drought-related livestock deaths is high.

The analysis indicates a high likelihood of commercial sustainability in the target market and describes events leading up to the pilot launch in Marsabit District in early 2010. The paper concludes that this insurance tool has largely succeeded in helping Marsabit’s livestock herders better manage their risk of drought. Growing interest from both commercial and development partners is helping to take this instrument to other arid and semi-arid districts in Kenya and other countries and regions.

3 Employ ICTs to raise smallholder income
The same Section 3 of the ILRI-AGRA book offers a case study from West Africa, written by Kofi Debrah, coordinator of MISTOWA, supporting the Role of ICT-based management information systems in enhancing smallholder producers’ incomes.

The problem: Smallholder African farmers typically have little access to reliable marketing outlets in which to sell their surplus produce at remunerative prices. Furthermore, their ability to respond quickly to market opportunities is constrained by lack of labour, credit, market information and post-harvest facilities. As a result, West African farmer incomes from agriculture are low and variable and little agricultural produce is traded in the region.

A solution: A project funded by the United States Agency for International Development (USAID), ‘Strengthening Regional Networks of Market Information Systems for Traders’ Organizations in West Africa’ (MISTOWA), helped build a private-public partnership to develop and deploy an ICT-based market information system that improved farmers’ access to markets. Some 12,500 agricultural producers and traders from 15 West African countries benefited from the project, with the beneficiaries reporting USD4,080 in benefits, or USD4.33 per dollar of donor funds invested.

Evidence from the beneficiaries suggests that access to real-time market information provides smallholder farmers with incentives for investing in agriculture.

 

4 Embrace informal agro-industry
Section 4 of the markets book, High-Value Commodities and Agroprocessing, includes a paper by ILRI scientists Amos Omore and Derek Baker on Integrating informal actors into the formal dairy industry in Kenya through training and certification.

The problem:  Throughout the developing world, most food produced by smallholder farmers is delivered and processed by an ‘informal’ agro-industry, which is the principal source of food for most poor consumers and a major source of employment of poor people as traders and service providers. In spite of this, agro-industrial policy has historically tended to displace this informal sector with a formal one featuring relatively large-scale and capital-intensive production and marketing. Other policy concerns, such as public health and municipal planning, have further selected against informal agribusiness, particularly livestock’s informal agro-industry.

A solution: This paper presents a case study of interventions in the Kenyan informal milk industry that led to changes in dairy policy that in turn reduced poverty levels in the East African country. The paper identifies the informal agribusiness sector as fertile ground for alleviating poverty and supporting vulnerable groups.

Policies do well to embrace informal agro-industry, the research indicates, while helping it transform itself into a more formal industry.

The ILRI scientists show that the informal dairy industry can respond well to consumer demand for quality, particularly for safe food, and, when unjustified policy barriers are removed, can compete well when price alone becomes the basis of competition. These achievements support much conjecture in the development literature about the centrality of markets, and access to them, for pro-poor development and the idea that pro-poor markets rely heavily on policy and institutional change. The lessons of this project are being transferred to other informal commodity sectors (goats, beef cattle and pigs) in Africa and Asia and the policy changes seen in the Kenya dairy project have been adopted across the East African region.

5 Encourage intra-regional trade
Section 6 of the markets book, Encouraging Regional Trade, includes a paper on The impact of non-tariff barriers on maize and beef trade in East Africa. The paper is written by Joseph Karugia (ILRI and ReSAKSS-ECA), Julliet Wanjiku (ILRI and ReSAKSS-ECA), Jonathan Nzuma, Sika Gbegbelegbe, Eric Macharia, Stella Massawe, Ade Freeman, Michael Waithaka and Simeon Kaitibie.

The problem: In 2004, the East African Community member states established an East African Community Customs Union, committing them, among other things, to eliminate non-tariff barriers to facilitate increased trade and investment flows between member states and to create a large market for East African people. However, several such trade barriers are still applied by member states and there exists little reliable information about how, and how much, these non-tariff barriers are actually hurting regional trade. This study identified the existing non-tariff barriers on the trade of maize and beef in East Africa and quantified their impacts on trade and citizen welfare in the region. The study found that the main types of non-tariff barriers within the three founding members of the East African Community (Kenya, Tanzania and Uganda) are similar and include administrative requirements, taxes/duties, roadblocks, customs barriers, weighbridges, licensing, corruption and transiting.

Some solutions: The study recommends taking a regional approach to exploit economies of scale by eliminating non-tariff barriers, since they are similar across the member countries and across commodities. Specific policy recommendations include streamlining administrative procedures at border points to improve efficiency; speeding up implementation of procedures at point of origin and at the border points; and implementing monitoring systems to provide feedback to relevant authorities on progress in removing unnecessary barriers to trade within East and Central Africa. The welfare analysis of the study shows that abolishment or reduction of the existing non-tariff barriers in maize and beef trade increases trade flows of maize and beef within the East African Community, with Kenya importing more maize from both Uganda and Tanzania and Uganda exporting more beef to Kenya and Tanzania. As a result, positive net welfare gains are attained for the entire East African Community maize and beef sub-sectors.

These findings give compelling evidence in support of the elimination of non-tariff barriers within the East African Community Customs Union.

Feb 222012
 

ILRI director for institutional planning Shirley Tarawali

ILRI director for institutional planning Shirley Tarawali (photo credit: ILRI/Stevie Mann).

Shirley Tarawali, director for institutional planning at the International Livestock Research Institute (ILRI), gave a slide presentation today (22 Feb 2012) titled ‘Options for enhancing resilience in pastoral systems: The case for novel livestock insurance’, at a Brussels Briefing onNew challenges and opportunities for pastoralism in ACP [Africa, Caribbean and the Pacific] countries.

Rangelands, Tarawali told the participants at this policy briefing, have fewer than 20 persons per sq km and a growing period of less than 60 days/annum, making crop production impossible. Constituting the largest land-use system globally, rangelands cover some 35 million sq km and support almost 50% of the world’s livestock. The 200 million pastoralists who live on rangelands are the environmental stewards of these vast resources, but many of them are among the world’s poorest, Tarawali reported, living on less than $2 a day. Subject to the vagaries of climate variability, food insecurity, poor markets and infrastructure, animal diseases, under-investment and conflicts over natural resources, pastoralists are among the world’s most vulnerable peoples.

A key development challenge, Tarawali said, is how to help pastoral communities increase their adaptive capacity and resilience in the face of shocks, such as the food crisis that followed a great drought in the Horn of Africa last year. At the risk of over-simplifying matters, she said, two main strategies can improve pastoral resilience: (1) help herders better secure the assets on which they depend—their animals and other natural resources (land, water, biodiversity), and (2) help them diversify their income sources, whether through better livestock marketing, sales of other rangeland products, or schemes that pay pastoral herders for ecosystem services and environmental stewardship.

Blind man awaits payout

A blind man awaits his pay out by a livestock insurance scheme being trialled in Marsabit, northern Kenya (photo by Jeff Haskins on Flickr).

Empirical studies of almost 1,000 families in the Marsabit region of northern Kenya, Tarawali said, show that pastoralists rely on their animals for at least 40% of their income, with loss of animals to drought being a major reason that pastoralists fall into poverty. ILRI and partners have tested an innovative insurance scheme designed to protect pastoralists against drought-related livestock deaths. Based on satellite data that determines vegetative cover, and thus forage availability, this insurance makes pay outs when the level of forage scarcity is predicted to cause a certain percentage of livestock deaths in an area. The scheme, which involves commercial insurance companies, has been piloted in northern Kenya since January 2010.

The pilot shows that it’s feasible to design index-based livestock insurance contracts attractive to both pastoralists and commercial institutions. To date, more than 3,000 pastoralists have participated in this novel insurance scheme, and more than 600 of them received indemnity payments in October 2011, following the drought in the Horn that year. Creative education tools have played an important role in helping these never-before-insured pastoral communities to grasp how the insurance works.

Taking the pilot scheme to scale, Tarawali said, will require making the scheme more cost-effective (perhaps through use of ICTs both to collect premiums and to make indemnity payments) and better aligning the different incentives of the partners, with the private (insurance) companies stressing copyright and profit and the public institutions (such as ILRI) aiming to enhance pastoral livelihoods.

Despite these challenges, she reported that this insurance tool has potential to help development agencies and governments shift their focus from making the right responses to droughts when droughts occur to investing in pastoral development on an on-going basis, with livestock insurance acting as a social safety net, securing the productive assets of these vulnerable populations in times of hardship. And she reminded her audience that most countries make significant public investments in agricultural insurance programs (US farmers pay only 40% of the actuarially fair premium and index-linked insurance in India is subsidized by some 50%). The index-based livestock insurance schemes now being piloted in Kenya and about to start in Ethiopia include rigorous evaluations of their impacts on pastoral welfare, which should help governments to efficiently target public investments in livestock insurance.

With this demonstration that index-based livestock insurance mitigates both pastoral vulnerability to drought and ad hoc coping strategies, Tarawali argued, it’s an appropriate time to consider redeploying some of the significant public funds spent in responding to droughts in insurance subsidy programs that keep insurance premiums affordable by poor pastoralists.

View the slide presentation: Options for enhancing resilience in pastoral systems:

 

 

For more information, visit the websites of the Index-based Livestock Insurance Project, www.ilri.org/ibli  and ILRI, www.ilri.org

Oct 262011
 

For those readers interested to get more local context about the recent first insurance payouts to livestock herders in Kenya’s northern Marsabit District (go here for an assembly of recent stories on this), here are two films ILRI produced on the subject when the insurance was first made available to Marsabit’s pastoral herders, in January 2010.

Livestock Insurance for Pastoralists in Kenya
January 2010 saw the launch of the world’s first livestock insurance for remote African pastoralists as a result of years of research.
Running time: 2:49

Development of World’s First Index-Based Livestock Insurance for African Pastoralists Herders
In Kenya’s drylands, drought has always been the greatest hazard faced by livestock herding families. Modern pressures are making this situation worse.This film tells the story of a research project started in 2007, which this year introduced a new form of insurance to remote herding peoples who had never been provided with insurance before. This new insurance product has potential to protect many other herding communities throughout Africa.
Running time: 12.36.

Oct 252011
 

NP Kenya 211011_22

ILRI director general Jimmy Smith speaks to residents of Marsabit, in northern Kenya, where a livestock insurance scheme has made its first payouts to small livestock keepers following a prolonged drought in the Horn of Africa (photo credit: Neil Palmer/CIAT).

Jimmy Smith, director general of the International Livestock Research Institute, made the following remarks on the occasion of the first payouts of index-based livestock insurance policies ever made to livestock herders in Africa in a region that has been afflicted by the drought that has reduced herds in the drylands of the Horn by a third.

NP Kenya 211011_46

Inhabitants of Marsabit town, in northern Kenya, attend a special event marking the first payouts of  a livestock insurance scheme to small-scale livestock keepers following a prolonged drought in the Horn of Africa (photo credit: Neil Palmer/CIAT).

‘Today ILRI’s Index-Based Livestock Insurance (IBLI) project provides 650 livestock herders in Kenya’s remote Marsabit District with the very first payments of index-based livestock insurance claims ever made on this continent.

‘That makes this an important as well as historic moment.

NP Kenya 211011_21

Members of the Marsabit community listen to speakers at the launch of the first payouts of livestock insurance in Africa (photo credit: Neil Palmer/CIAT).

‘The success of any insurance scheme depends on its clients being confident that payments will be made if and when an insured event occurs. I hear that many have been reluctant to purchase the livestock insurance policies being offered to Marsabit’s livestock keepers in August and September of this year [2011] because the herders first wanted to be assured that this insurance product works and—in this time of great drought and livestock losses here and elsewhere in the Horn of Africa—if it will payout. Now that the appropriate payments are being made and in a timely manner, we hope we have earned the trust of people here, trust that will generate more widespread awareness and interest in this livestock insurance product.

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Women of the Marsabit community listen to speakers at the launch of the first payouts of livestock insurance in Africa (photo credit: Neil Palmer/CIAT).

‘We are celebrating today not only the first payouts but also that the livestock index that predicts mortality in this region seems to be working well; several of our on-the-ground partners in Marsabit are in agreement with the figures. Our relatively inexpensive way of estimating livestock deaths in a time of drought and forage loss appears to be reliable and could now open the door to making livestock insurance widely available in Marsabit and similar areas in Kenya’s northern drylands, which are home to many of its pastoral peoples.

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At a village meeting in Dirib Gombo, farmers who took out livestock insurance hear they are to receive their first payout after a prolonged drought in the region (photo credit: Neil Palmer/CIAT).

‘For all its initial success, this insurance project remains a work in progress. We’re aware of the challenges of raising awareness of the program in the more distant areas of Marsabit and making sales across the entire district. And even as we trust that those who purchased this livestock insurance will receive their payments in the shortest time possible, we recognize that many clients will have to be paid manually, a process that involves costly driving to areas as far as Loiyangalani and Illeret, where some pastoralists also bought contracts. That said, over the last three insurance sales periods since January 2010, Equity Bank’s Point of Sale systems and UAP’s telephone scanners have made the process more efficient. Over the next several seasons, on-going efforts will continue to improve the technology platforms delivering IBLI services, making them increasingly more cost-effective and accessible.

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At a village meeting in Dirib Gombo, officials prepare to make the first insurance payouts after a prolonged drought in the region (photo credit: Neil Palmer/CIAT).

‘The most important sign of success is the response of the client. So even as payments are being made, we at ILRI want to know what impact the payments are having and how valuable the insurance product is. You will see the ILRI team in this area conducting research to understand how IBLI is benefiting the community and those households that bought livestock insurance. We worked with members of the community to design and develop this product, and we are keen to receive your suggestions about ways to improve it.

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At a village meeting in Dirib Gombo, farmers who took out livestock insurance receive their first payout after a prolonged drought in the region (photo credit: Neil Palmer/CIAT).

‘‘A project such as this is necessarily a product of collaboration. ILRI and our commercial partners Equity Bank and UAP Insurance—those who actually market and sell the product—are quite visible, but there are several others that must be recognized. Cornell University and the Index Insurance Innovation Initiative (I4) based out of the University of California at Davis have been instrumental in the development of the IBLI product and supporting the research agenda behind it. Closer to the ground, members of the Marsabit District Steering Group have offered invaluable support and advice to the project team, as has Food for the Hungry International. The project has also received tremendous support from the Ministry of the Development of Northern Kenya and the Ministry of Livestock and the Provincial Administration, from the District Commissioner to chiefs and counsellors across Marsabit. Finally there are the hundreds of young men and women across all divisions of Marsabit who have worked tirelessly conducting surveys and product education and extension.

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Leader of the Index-Based Livestock Insurance Project, ILRI’s Andrew Mude (right), answers a questions from the Marsabit community (photo credit: Neil Palmer/CIAT).

‘We’re now working to see if IBLI can be sustained by commercial partners such as Equity Bank, UAP and others that may be interested. Currently, however, the research, design and implementation of the IBLI project has been funded by numerous donors who believe in its potential. For this we must thank the European Union, the Global Index Insurance Facility, the Microinsurance Facility, the World Bank and the United States Agency for International Development.  The British Government, through UKAID, has been one of the largest supporters of the project and, together with the European Union, will be funding the second phase of scaling up.’

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A farmer awaits a livestock insurance payout following a village meeting in Dirib Gombo, near the northern Kenyan town of Marsabit; some farmers in the village took out livestock insurance, and this year are receiving the first payouts after a prolonged drought in the region (photo credit: Neil Palmer/CIAT).

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One of the many head of cattle that perished for lack of fodder in the drought that dried up the rangelands of Kenya’s Marsabit District this year (photo credit: Neil Palmer/CIAT).

Read a related story on this ILRI News Blog: Herders in drought-stricken northern Kenya get first livestock insurance payments

Editor’s note, 26 Oct 2011: The original title of this blog post, ‘Livestock director and partners launch first-ever livestock insurance payments in Africa,’ was changed to ‘Livestock director and partners launch first-ever index-based livestock insurance payments in Africa;’ other forms of livestock insurance (not index-based) have been available in other parts of Africa. Two similar statements in the body of the blog were similarly corrected.

Aug 252011
 

Andrew Mude, Scientist, Targeting and Innovation

ILRI scientist Andrew Mude leads a project introducing insurance to the pastoralist communities of Kenya’s remote northern Marsabit District, which is also where Mude is originally from (photo credit: ILRI).

Last night (24 Aug 2011), ABN’s South African correspondent Lerato Mbele interviewed Andrew Mude, leader of an Index-Based Livestock Insurance Project at the International Livestock Research Institute (ILRI) in Kenya.

Before Mude went to the studio in Nairobi to do this live television news interview, he sat down with ILRI staff to prepare what he wanted to say. Here’s a summary of what he had on his mind.

Kenya’s drylands are big; they make up 80 per cent of the Kenya’s total area, in which some 10 million people raise 70 per cent of the country’s livestock.

The value of the pastoral livestock sector, which includes meat, milk, and other products from these animals, is estimated to be worth US$800 million annually. And roughly 90 per cent of the meat consumed in East Africa comes from pastoral herds.

Research confirms that the pastoral livestock sector is not only productive and critical to Kenya’s food security, but also an optimal way to manage and maintain drylands and the livelihoods of those who live off them.

At a time when the government and donors are looking for long-term solutions to addressing food security, our research suggests that herding makes better economic sense than crop agriculture in many of these arid and semi-arid lands. Supporting semi-nomadic livestock herding communities with timely interventions before a crisis hits can help people cope the next time drought threatens.

Recommending that livestock herders switch to farming crops is simply unrealistic for most of the people inhabiting this region’s great drylands; building vast irrigation systems here is simply not feasible in both economic and ecological terms.

Droughts have always been part of life for people in drylands but these droughts are now coming more frequently and affecting many more people across rangelands that are becoming more and more fragmented. Farmers and livestock herders need options and support to cope with recurring drought, particularly in the face of other kinds of climate change. Luckily, options exist.

For example, my organization, ILRI, based here in Nairobi, is working with UAP Insurance, Equity Bank, and SwissRE to roll out an insurance program for several thousand livestock keepers in Marsabit District to protect them against drought.

Standard types of insurance are not feasible for remote livestock herders such as those in Marsabit, where throngs of officials would be needed to verify livestock deaths before insurance companies would make pay outs to the insured. So we came up with a model that makes use of satellite data showing the state of a region’s vegetation. When the satellite data show that the available forage drops below a given threshold, where one would expect most livestock to perish, all insurance policyholders are paid, whether or not their animals died. With tweaking to cater for various local conditions and lots of training to educate communities that have never before had insurance schemes available to them, these kinds of programs could be extended across the drylands of Africa.

Watch this 7-minute television news interview of ILRI’s Mude, who argues that pastoralism is a system that evolved to take advantage of arid and semi-arid lands, such as those suffering drought now in the Horn of Africa: CNBC Africa: Investing in pastoralism with Andrew Mude, 24 Aug 2011.

Aug 162011
 

ILRI researcher with local people in Marsabit, Kenya

ILRI researcher holds discussions with local pastoral herders in Marsabit, in Kenya’s northern drylands, for ILRI’s Index-based Livestock Insurance project (photo credit: ILRI/Mude).

SciDevNet reports that, due to the great drought engulfing the Horn of Africa, an ‘index-based’ livestock insurance scheme for herders in Kenya’s remote Marsabit District may make payments to those who had earlier purchased the insurance. This is the first time insurance has ever been offered Kenya’s remote livestock herders, and these would be the first payments for those who have insured their stock.

What is ‘index-based’ livestock insurance?
Index-based livestock insurance makes the risk-management benefits of insurance available to poor and remote clients. The product being piloted in Marsabit District by the International Livestock Research Institute (ILRI) and other partners, including the private sector, aims to provide compensation to insured pastoralists in the event of livestock losses due to severe forage scarcity. Incorporating remotely-sensed vegetation data in its design, delivered via mobile ICT-based transactions platforms, and with experimental extension methods used to educate the remote pastoral herders, this insurance product boasts many firsts in product development. Payments are triggered when severe drought makes forage scarce over a long period and when it can be predicted from that that more than 15 per cent of livestock in the area will have died of starvation.

SciDevNet reports the following.
‘Insurers will assess in October whether Kenyan farmers signed up to the Index-Based Livestock Insurance scheme will receive their first payment, after the worst drought in the region for 60 years.

‘The scheme, which has been piloted in northern Kenya since early 2010, uses freely-available satellite data to assess the state of pastures. When the images show that pastures have dried up, farmers can claim compensation for animals that have died as a result—without insurers having to verify the deaths in person.

‘In Kenya about 2,500 farmers have purchased the product since its inception, paying a yearly premium of up to US$100 for 6–8 animals. . . .

‘”So far, the predicted mortality [rate is] high—but we have to wait for the final tally at the end of October in order to determine whether or not there will be a payout,” said Brenda Wandera, project development manager at the International Livestock Research Institute (ILRI), Kenya, which implemented the scheme.

‘The scheme will be extended to southern Ethiopia in February 2012 to help mitigate the effects of drought. It will initially target 2,700 pastoralists.

The aim is to find a viable insurance tool that could cushion pastoralists from heavy losses experienced during droughts, according to Wandera.’

‘ILRI will partner with the Nyala Insurance s.c. company in Ethiopia, with support from the International Food Policy Research Institute, the US international development agency USAID and the World Bank. . . .’

The technical partners in this project
Cornell University
Index Insurance Innovation Initiative
Syracuse University (Maxwell School)
University of Wisconsin (BASIS Research Program)

The implementing partners
Equity Insurance Agency
UAP Insurance Limited
Financial Sector Deepening (FSD) Kenya
Kenya Meteorological Department
Kenya Ministry of Development of Northen Kenya and other Arid Lands
Kenya Ministry of Livestock

The donor agencies
UK Department for International Development (DFID)
United States Agency for International Development (USAID)
World Bank

Read the whole article at SciDevNet: Kenyan farmers may soon receive first drought payout, 15 Aug 2011.

For more information, visit the blog of ILRI’s Index-Based Livestock Insurance project.