The Boma

Drought insurance: Breaking the cycle of loss for millions of pastoralists

• International Livestock Research Institute • Season 2 • Episode 7

Share episode

Droughts have always occurred in the Horn of Africa, but in the past few years they have begun happening much more frequently. 

An award-winning scheme of index-based livestock insurance could provide a lifeline for millions of pastoralists whose livelihoods are affected by drought. There is no need to wait for a drought to become severe, for animals to die, or people to starve. Instead this scheme can help resilent pastoralists deal with climate shocks before they happen.

Presenters Brenda Coromina and Elliot Carleton take a look at how the insurance works, and why it is needed.

The index-based livestock insurance project at ILRI is run with the help of a variety of partners, including the World Bank, Cornell University, UC Davis, and the Kenyan government.

This episode features a clip from a video interview with Guyo Malicha Roba by The Elephant.

Learn more:

After 10 years in Kenya and Ethiopia, are we ready to scale up livestock insurance in the Horn of Africa?

ILRI

Drought Management in Kenya Should Pivot from Crisis to Risk Management

The Elephant

Brenda: Welcome Back to The Boma. A podcast from the International Livestock Research Institute where we discuss how sustainable livestock is building better lives in the Global South. 

My name is Brenda Coromina.

Elliot: And I’m Elliot Carleton. 

Brenda: Between 2010 and 2011, a severe drought in East Africa killed more than a quarter of a million people—and half of them were children. Since then, 3 failed rainy seasons have dried up many sources of drinking water for both people and their livestock and have brought lasting ruin to many farming and herding communities in this region.

Elliot:Now, droughts have always occurred in the Horn of Africa every 3 to 6 years or so. They’re caused by La Niña, a natural weather cycle that cools the eastern pacific. 

 

Brenda: What’s new is that droughts in the Horn have begun occurring much more often, sometimes one coming right after another, which gives many of the region’s farming and herding communities across these drylands no time to recover before they’re struck with another drought. 

 

Elliot: ILRI works with other organizations to find out how to protect pastoralist farmers from droughts. One such partnership is Jameel Observatory. 

 

Guyo: What in science we call global warming…40-50 years, as a decade of, you know, drought’ 

Brenda: That was Guyo Malicha Roba, in an interview he did with The Elephant on drought management in Kenya. He’s the current head of the Jameel Observatory, which is based at ILRI, and specialises in issues facing pastoralists in east Africa. 

Elliot: This year alone, between 12 and 14 million people are facing unprecedented food insecurity, water shortages, and failed harvests because of climate change. Millions of livestock have died.   

Brenda: And although humanitarian aid can go a long way in alleviating the devastation… it can often take a long time for communities to receive aid.

Elliot:These livestock communities need a newer, faster approach to protect them against the climate crisis. And this is something that ILRI has been exploring through index-based livestock insurance projects.

Brenda: These projects provide a new type of insurance for dryland herders. The schemes don’t wait for a drought to occur, for animals to die, or people to starve. Using real-time satellite data, payouts are made to insurance holders before a drought hits.

Rupsha: So basically it works as what we call as an asset protection product or an asset production protection mechanism.

Brenda: That’s Rupsha Banerjee, a scientist here at ILRI working on sustainable livestock systems. Rupsha leads projects like IBLI and DIRISHA.

Rupsha: By that, we mean that the product is designed so that the vegetation is monitored over a period of time, like over a season. And basically the payouts trigger when like just before the dry season has become really, really bad.

So the idea is that the payouts triggering will help the household essentially to buy the asset or to get access to those essential services, like it might be vaccination, it might be feed, it might be fodder, it might be even their own household consumption needs or whatever it is. And it helps as a cushion so that they don't lose their asset and they don't fall from a certain level at which they are into a very much more vulnerable situation.

Elliot: Because herders shouldn’t have to just react to crises. Droughts are here to stay, and herders need to take action early on.

Rupsha: I think that's also the reason why there's not so much of emphasis on conservation and also treating drought the more of like as a systemic process rather than just like an individual environmental process. So that's why when we're also talking about things like resilience, and all that, like, you know, you're not just looking at the environmental factors because, yeah, clearly this is not going to reduce. It's possible that it might increase. But of course we have to try everything to make sure that it doesn't increase. But should it increase like, you know, then it is just not an environmental shock, but it generally just affects an entire ecosystem of things. So that's where to deal with this kind of a shock or to cope with it. People will have to start looking at at a more holistic level rather than just looking at like, okay, there is a drought. You know, people have to be more prevent preemptive rather than reactive.

Elliot: So IBLI was first launched in 2010, in Kenya. It was created by economist Andrew Mude, who won the World Food Prize for his work on IBLI in 2016.

 

Brenda: And at first, the insurance worked like typical insurance. After a drought, after the damage was done, herders received payouts to replace dead livestock.

 

Elliot: But the problem was that herders had to ‘start over’ after every drought, and it became a vicious cycle of loss and replacement. This is why IBLI has since evolved to provide payouts for livestock water, food, and medicine before the drought hits hard.

 

Brenda: As Rupsha explained, the trigger isn’t whether someone has lost a certain number of animals, but whether the vegetation has fallen below a certain threshold. This is the ‘index’ that IBLI measures to decide how much payout to provide, because it is a sign of an oncoming drought.

 

Rupsha: So basically, IBLI is based on a satellite-based index, a differentiated vegetative index. And that's kind of like a gold standard so far for any kind of index insurance product. 

 

The idea is that the satellite takes the data of every 10 days over the overall given season and then this data is accumulated at the end of the season. And then that's how the index maps are are produced. And then this is compared to historical data and so on. And then based on that, then the payout this triggered. Of course, it's a much more complicated mathematical model that is used. But very simply, that's how it works.

 

Brenda: The other project, DIRISHA, is a framework to scale up IBLI, which has since expanded to Ethiopia. This project collects more complex data on the ground, by surveying specific sites in the drylands for data about market prices, rangeland conditions, and human nutrition. 

 

Elliot: They do this is through an app.

 

Rupsha: We give them tasks. So the way that the mobile platform is designed is that each of them have tasks and small questions, very easy and very quick to do questions. We train them like sometimes it's physical.

 

We have WhatsApp groups so that engaged like there are some issues people of the team can actually interact with them and things like that on some of the problems. So then on a weekly basis they collect the data based on a particular task depending on what you what what they want to collect. So it's like not everybody needs to collect everything, but they are given choices.

 

But most of the time they do actually collect everything.

 

Elliot: Contributors collect data about market conditions on a weekly basis, and rangeland conditions every 10 days or so by going out into the field, walking 20-or-so steps east, west, north, and south, so that scientists can examine the variation across a particular area, and collect information in places where satellite data is insufficient. 

 

Brenda: And this approach can pick up data that satellites can’t, including livestock mortality. But it is also helps inform vulnerable communities in real-time that a drought may be headed their way.

 

Kelvin: That type of insights I think is extremely important because it generated them in a timely manner, you know, to guide the decision making. I think the other thing that is is important is that through the feedback mechanism directly to the pastoralists, they can be able to make timely decisions. Right? So I talked about, for example, with my team being able to analyze the data and seeing what, you know, what they transferred.

But then that would also take some time for us to really, you know, combat internally feedback. OK, but having a system that provides little feedback directly to to pastoralists almost immediately can help them to really start to using some of those information in in their own decision making.

 

Brenda: Kelvin Shikuku is another scientist here at ILRI. He manages information and monitors developments for IBLI and DIRISHA. Kelvin knows smallholder farmers, pastoral communities, and livestock herders are the most affected by drought.

 

Elliot: This is because rain is integral to these communities. It affects the planting season, the harvest rate, the pasture, and ultimately, the livestock that are central to their livelihoods.

 

Brenda: Without rain, they’re forced to make impossible decisions like selling major assets to make ends meet, pulling their children out of school, and skipping meals. 

 

Elliot: And this leads to wider problems for the whole region. Like conflict.

 

Rupsha: they lost their livestock which is like a huge asset, if they didn't lose them they were doing distressed sales so like not getting the kind of prices that you would want to get in the market, then it affected their household, not just the income but also then household consumption patterns, right.

 

Like you know, people were not eating like they were skipping meals and all that kind of thing. So all of this, all of this is an aftereffect. And one of the things that people probably don't want to attribute to. But but could be a cause is that it also leads to conflict actually, because the thing is that it is when because it comes to a very desperate situation where you need livestock, you need your because that's kind of like your livelihood as well as assets.

 

So it kind of gives rise to more of like cattle rustling, things like that, or even going into grazing areas, which is you go to you're not supposed to go to. And then it does encroaching on other people's grazing areas as a result of which like, you know, then people start fighting among themselves. And before you know it, this escalates to a point and then it becomes like a national crisis, you know, and then the then the government and all that have to start intervening and all that kind of thing.

 

So so there's like a lot of there's a lot of immediate and the obvious effects. And then of course, there are the secondary ripple effects which like, you know, which kind of escalate and cascade over a period of time.

 

Elliot: But Kelvin says IBLI and DIRISHA are more than just insurance schemes or warning systems for pastoralists. The data that’s collected can help policymakers as well. 

 

Kelvin: Well, the, the the ultimate goal is to make this information widely accessible outside. I mean, it's, it's relevant for us that because we have different you know, units. But it's also important for people outside the airline. Right? So for research purposes, of course, we want the information you know, improve the design, think about how we want to target our interventions, et cetera.

 

Elliot: And it’s important to him that the data from the IBLI and DIRISHA projects are shared widely.

 

Kelvin: Outside, we want to ensure that this is disseminated is widely as possible. So that, you know, other people can can also help. I mean, we, you know, will not be able to to intervene in all aspects. But, you know, availing this information to our partners, make sure that people can identify how they want to use the information. And so one way we are doing that is through the dashboards that we have that we've created.

 

And so those dashboards that way be accessible to, uh, to different stakeholders so people can be able to, you know, see the trends. People can be able to identify relevant areas or important areas of intervention.

 

Brenda: IBLI and DIRISHA have changed a lot over the years… and many other changes are in the works. One thing that scientists and insurers have learned throughout the project is that this isn’t exactly a money-making enterprise. Still, some insurers have been happy to participate because they see it as part of their corporate social responsibility to the people of the community they serve.

 

Elliot: But overall these schemes rely on government support and donor funding to survive—at least for now. One idea for the future is to bundle services together so that if farmers or pastoralists pay a premium and there’s no drought, they still feel like they gained something.

 

Brenda: And these are all things that can be worked on in due time. But Rupsha and Kelvin are hopeful about the sustainability of the project and being able to scale it up.

 

Kelvin:  we also need to think about the modeling environment for ability to to to thrive at scale. And so for me, the sustainability of I believe, therefore comes will require that it please bundle with other services. I mean, we can collectively plus. But my idea is that we need to think about other interventions, other services, other practices that can be promoted to be able to really reduce the risk that, uh, you know, that person is first. And for the developed information systems, you know, connect application between using um, the pilot has shown a clear success story the sustainability can also be seen from the, you know, interest that this is generating among the people that have interacted with the different stakeholders that I've interacted with, the platform people that we have disseminated the initial findings to.

Right. And so it's, it's sustainability is emerging from the fact that it's not just in re pushing the, the build up, but it's also like different stakeholders actually picking it up and wanting to incorporate it. India in their programs.

 

Elliot: It’ll take time to get there. So far, over 50,000 IBLI policies have been sold in Kenya and Ethiopia. And that’s a small number out of the 19 million pastoralists living in these countries alone. 

 

Brenda: But droughts destroy lives. And they can cost countries billions of dollars, whether in lost livestock, or humanitarian aid. So maybe these schemes show we’ve reached a crossroads. It’s no longer about reacting to our changing climate, or to the aftermath of a disaster, but about building up resilience among vulnerable communities.  

 

Elliot: So thank you to Rupsha Banerjee and Kelvin Shikuku for taking the time to talk to us about this project.

Brenda: And thank you to our listeners for joining us. We would love to hear your feedback on today’s episode or the whole podcast series. So please reach out to us on Twitter at BomaPodcast to let us know your thoughts, and also, what topics you’d like us to cover moving forward. And if you enjoyed today’s episode, please don’t forget to share and subscribe. I’m Brenda Coromina.

Elliot: And I’m Elliot Carleton.