Ethiopia is set to introduce weather index-based crop insurance for smallholder farmers.
Ethiopian Insurance Corporation (EIC)hief executive Yewondwossen Eteffa said that the Public Financial Enterprises Agency (PFEA) is working on the roles of the parties that will roll out the insurance cover.
The product is expected to reach over 200,000 farmers initially and millions more later.
At a consultative meeting held last week, Megerssa Miressa, the director of microinsurance programme at Kifiya Financial Technology Plc (KFT) said the organisation was providing companies the platform to develop microinsurance products at a low cost.
The meeting was organised by the Public Financial Enterprise Agency, the Agricultural Transformation Agency (ATA), the Ethiopian Insurance Corporation, National Meteorology Agency and KFT.
The state-owned EIC will be the underwriter for the weather index-based crop cover, while PFEA and ATA will help create an enabling atmosphere.
KFT’s partner University of Tewnte, in the Netherlands has been developing the risk model and conducting research, as well as the digital finance platform for the product.
A 2015 global report by the Consultative Group for International Agricultural Research, which highlights approaches to insuring poor nomadic pastoralists in challenging circumstances shows that in Kenya, Rwanda and Tanzania, the Agriculture and Climate Risk Enterprise has recently scaled up to reach nearly 200,000 farmers, bundling index insurance with agricultural credit and farm inputs.
“In Ethiopia and Senegal, the R4 Rural Resilience Initiative has scaled up unsubsidised index insurance to over 20,000 poor smallholder farmers who were previously considered uninsurable,” said the report dubbed Scaling up index insurance for smallholder farmers: Recent evidence and insights.
The R4 Rural Resilience Initiative is a risk management approach that helps communities be more resilient to climate variability and shocks.
SOURCE: THE EAST AFRICAN