Insurance for Ethiopian Herders Aims to Combat Drought, Conflict

Monday, December 8, 2014

Nomadic livestock herders in Ethiopia have received their first payout from an insurance scheme that tracks poor pasture conditions with satellite technology.

Ethiopia has difficulty drawing full advantage from its livestock resources – the largest in Africa – because of the unreliability of pasture and water caused by persistent drought.

The new insurance scheme, known as index-based livestock insurance, aims to reduce losses, support pastoral communities, and lower the risk of conflict sparked by pastoralists migrating into agricultural areas in search of forage or water.

Coverage has been sold since July 2012 in southern Ethiopia’s Borena zone by Oromia Insurance Company (OIC), with technical assistance from the International Livestock Research Institute (ILRI), U.S.-based Cornell University, and Mercy Corps, an international development organisation. Just over 500 pastoralists took up coverage initially.

The scheme was based on an earlier insurance effort rolled out in 2010 in neighbouring Marsabit region in northern Kenya, said Andrew Mude, principal economist at ILRI in Nairobi.

Source: Reuters (link opens in a new window)

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Agriculture
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agribusiness, farmers, financial innovation, financial services