Scheme part of a project sponsored by World Bank targetting livestock farmers in Kenya, Ethiopia, Somalia and Djibouti
Livestock farmers in Kenya will now have the option to be protected under a $140-million expanded insurance scheme to cushion them against climate change-related frequent droughts.
The insurance is part of a project, De-risking, Inclusion and Value Enhancement of Pastoral Economies (DRIVE), sponsored through a credit facility by the World Bank targeting 1.6 million herders in Kenya, Ethiopia, Somalia and Djibouti under the framework of the Horn of Africa Initiative, as per Kenya’s Ministry of Agriculture.
The scheme is the largest of its kind in Africa and is expected to benefit the livestock farmers who are often forced to sell their animals at throwaway prices when drought strikes. This devastates their livelihoods, as livestock is often the main source of income for these farmers.
“The scheme is implemented by the State Department for Livestock Development in partnership with the private sector ZEP-RE Reinsurance and Kenya Development Corporation. The project is expected to benefit over 125,000 pastoral households or about 800,000 people,” read a press statement from the ministry.
Stakeholders, including farmers and experts from key organisations operating in the country, like International Livestock Research Institute (ILKRI), have lauded the move.
The insurance scheme is a significant step towards building resilience among smallholder farmers most affected by climate change-related disasters, they said.
The cover will enable them to continue with their farming activities, even in the face of harsh climatic conditions, thus ensuring food security and boosting economic growth in the country.
The ministry statement said:
Prolonged droughts cause more than 15 per cent livestock mortality in Kenya. The ongoing drought has been the worst. The country has lost livestock worth more than Ksh 130 billion (Rs 7,907, crore) due to drought in the last two years. The worst affected are the pastoralist communities where drought has wiped off more than 2.6 million livestock.
Heat stress has already reduced milk yields and red meat production in Kenya and East Africa by more than 30 per cent since 2017, studies from key national and regional organisations such as Kenya Agricultural and Livestock Research Organisation and ILKRI indicated.
The loss of livestock usually translates to billions of Kenyan shillings in losses and an acute reduction in annual economic output due to locals’ dependence on livestock farming and others, the ministry said.
“Overall, the livestock insurance scheme is a positive development for farmers in Kenya, especially those in arid and semi-arid areas who bear the biggest brunt. It’s also hoped that it will inspire other African countries to develop similar initiatives to support their farmers,” said James Ng’eno, a livestock farmer in Kajiado County on the outskirts of Nairobi city.
The new DRIVE scheme replaces a previous livestock insurance scheme called Kenya Livestock Insurance Program (KLIP), which ran from 2015-2021.
Since 2010, Kenya has invested in livestock insurance schemes. However, multiple studies, including one by ILKRI, indicate such schemes have always faced challenges. Experts have warned that these have to be overcome for the success of the new, expanded and comprehensive cover.
Francesco Fava, a professor at the University of Milan and former team lead of a research programme by ILKRI on livestock insurance in Kenya and Ethiopia, is concerned with the modest demand and uptake of similar covers in the past.
“In 2019, only 33,000 farmers were insured in Kenya and Ethiopia. This figure is too low compared to the estimated 19 million pastoralists and agro-pastoralists living in the two countries,” said Francesco, in a commentary related to the report for ILKRI.
One common challenge is limited demand for the insurance policy due to ignorance and little information. In their report, ILKRI noted many pastoralists are unfamiliar with paying and renewing premiums, which may or may not result in a drought-related payout.
“Fewer than 10 per cent of the pastoralists who purchased the livestock cover in 2012-13 went on to renew them in 2013-14,” read the ILKRI report in part.
Among the many recommendations, ILKRI called for the setting up of a learning agenda around livestock insurance. Also, there is a need for robust mechanisms to monitor the operational functioning of the policies and build trust in their value, according to the ILKRI report.
After announcing the insurance scheme, principal secretary of Kenya’s Ministry of Agriculture Harry Mutai said livestock insurance is not the only strategy for building the resilience of pastoralists in the region, but certainly a step in the right direction.
“In the last year alone, most pastoralists and herders in arid and semi-arid areas have lost more than half of their livestock. Current estimates from the State Department for Livestock indicate that about 3.5 million Kenyans who depend on livestock have lost their livelihoods to the prolonged drought,” he said, adding that there is an urgent need to avoid similar devastation in the next drought cycle.
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