NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Friday, June 12, 2015

ZIWAY, Ethiopia, June 11 (Thomson Reuters Foundation) — Gebre Sire, a farmer from the village of Abine Germama in Ethiopia’s Oromia regional state, has been paying into weather-index based crop insurance for over two years. While he’s happy that he has recently received his first payout after drought ruined his corn crop about a year ago, he feels there are ways to better maximize the scheme’s benefits.

“I’ve already been paid 250 birr ($12.50) on the 100 birr ($5) premium I pay every season,” he said. But the value of the birr has been steadily dropping since the scheme began three years ago, and Sire says his payout doesn’t quite cover all of his costs.

“The premium we pay is too small,” he said. “I would like it to increase along with the payout.”

For Ethiopian farmers dealing with the worsening impacts of climate change, small-scale crop insurance can be a lifesaver. But the insurance needs to expand – and undergo some tweaks – to effectively help them effectively recover from extreme weather, farmers and experts say.