Drought / Drylands / East Africa / Ethiopia / Food Security / ILRI / Insurance / Kenya / Pastoralism / Pro-Poor Livestock / Project / Vulnerability

To insure or not to insure: That is the question for Kenyan herders restocking after the great drought of 2011


The first payouts for livestock insurance being made in Marsabit District, in northern Kenya (photo on Flickr by Jeff Haskins).

From Reuters AlertNet comes this update on how the livestock herders of Kenya’s Marsabit District are faring. Some bought an innovative livestock insurance product this year that is being piloted by the International Livestock Research Institute (ILRI) and Equity Bank and other partners. Others relied solely on traditional pastoral coping mechanisms, such as moving stock to find new pasture, to try to keep their cattle, goats and other animals alive in the great drought that affected Marsabit and other drylands of the Horn of Africa this year.

‘The rains have finally arrived in northern Kenya’s Marsabit district, and Huka Dabaso plans to buy 10 cattle to replace the animals he lost during this year’s severe drought. He can afford to restock his herd thanks to the first payout from a pioneering insurance scheme that uses satellite imagery to estimate livestock deaths in the region.

‘“This programme will assist me and others in restocking, and starting pastoralism afresh at this time when we are receiving rains and hoping the situation will change,” says the herder from Gadamojii village. . . .

‘In late October, 650 herders received compensation for the loss of thousands of cows, camels, goats and sheep due to the drought. The payout from the index-based insurance scheme being piloted in Marsabit by the Nairobi-based International Livestock Research Institute (ILRI), together with commercial, research and government partners, has elicited mixed reactions from herders. But most say it will help them recover from this crisis better than in the past.

‘Up to a third of livestock in Marsabit district are estimated to have died during this year’s drought, which has affected over 13 million people across the Horn of Africa.

‘The insurance scheme uses NASA satellite images of vegetation to determine losses of livestock forage, which are fed into a statistical model that projects livestock deaths. The aim is to make it easier for communities of migratory herders, known as pastoralists, to cope with and recover from extreme weather.

‘Herders in high-risk drought areas pay a premium of 5.5 percent of the value of their herds, while those from lower-risk areas pay 3.25 percent. Clients are compensated when indicators show their animals are at risk of death. The insurers do not assess actual livestock losses on an individual basis, which would be impossible as pastoralists and their animals move over vast tracts of arid land in search of pasture and water.

‘Most pastoralists who took out insurance cover are optimistic that their payouts will help them restock their hard-hit herds. But others say they have lost many animals and the compensation is not enough to replace them, as livestock are scarce in local markets and their prices have soared. . . .

‘Local NGOs are hopeful that the ILRI-backed insurance scheme will reduce the cattle-rustling that has plagued the region after recent droughts, as many herders resort to stealing animals in armed attacks. . . .

‘Under the policy terms, insured pastoralists are compensated for herd losses of above 15 percent. Most people in Marsabit District are herders, together owning some 86,000 cattle and two million goats and sheep.

‘ILRI Director General Jimmy Smith admits that some herders have stayed out of the scheme due to a lack of understanding about how they would be compensated. But he hopes the first payout and accompanying celebrations will encourage more pastoralists to join. . . .

‘The programme is still in its pilot phase, and is looking to address challenges that are arising before it is expanded to other pastoralist areas, the economist added.

‘The next step is to launch a similar insurance scheme in the Borana region of Ethiopia, which borders Marsabit, and the funding is now in place to design an insurance contract, Ikegami said.’

Read the whole article at AlertNet: Drought insurance falls short for some Kenyan herders, 15 Dec 2011. This story is part of a series supported by the Climate and Development Knowledge Network.

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