Satellites restore smiles in Ethiopia
Weather index-based insurance is allowing rural families to look after themselves while keeping their livestock healthy
The braying donkeys staring into the distance, crisscrossing cart tracks and shuffling shoats (hybrid sheep-goats), are clues that the inhabitants of the sandy Shambal village really depend on their livestock.
Shambal is 15 kilometres — or half a day’s walk— from Dollo Ado town on the Ethiopia’s border with Somalia. The 170 families living there have few employment opportunities. They rely on incomes from subsistence farming, transporting goods on carts and collecting firewood to sell or barter with.
But while the land is so important, the community has been unable to use it to its full potential after two bad rainy seasons resulted in poor harvests.
The residents of Shambal face a daily struggle.
The combination of a brutal climate, limited employment opportunities and a volatile security context means that the residents of Shambal depend on food assistance from the World Food Progrmame (WFP) for survival. Seasonal rainfall shortages and droughts have severely impacted their lives and livelihoods by limiting sources of food and income.
‘My family is lucky. We managed to grow a few onions and tomatoes’
Searching for tech solutions to climate shocks, WFP developed the Satellite Based Index Insurance Programme (SIIPE) which provides access to weather-index insurance for vulnerable households in exchange for contributing to the construction and rehabilitation of community assets.
Those assets, such as terracing and other soil and water conservation activities, are designed with local authorities and have the tangible benefit of decreasing entire communities’ vulnerability to climate shocks over time.
Additionally, livestock insurance provides cash compensation in case of drought. This helps the families protect their core breeding animals and avoid distress sales. In addition, they receive training on financial literacy, income diversification, access to veterinary services and seed and fodder provision in order to build their longer-term resilience to drought-related shocks.
Thanks to Swedish and Swiss funding, the innovative climate risk management project is benefiting 8,000 families in 32 villages. All are in places identified as being particularly vulnerable and prone to climate shocks.
The system uses “normalised difference vegetative index” technology to measure photosynthesis in vegetation and the level of productivity and growth of plants — essentially the greenness of an area. After identifying vegetation that is below average growth thresholds, SIIPE then automatically triggers insurance payouts.
‘The cash means my cows and donkeys are happy. I buy fodder so they can eat and vaccines so they stay strong’
Shambal residents like Ibrahim rely on their herds of donkeys as economic assets. The animals can only lug carts laden with goods along the dusty roads if they are well-nourished. In Ethiopia saving livestock is increasingly an imperative for WFP.
Everyone is in debt, forced to borrow from friends, neighbours, shopkeepers — anyone who has spare cash to buy tools, seeds and fodder. The SIIPE cash is used by some to repay agricultural debts but is mostly channeled towards core items with the hope their use will pay off and debts can be repaid.
This year, SIIPE triggered payouts for two seasons in four districts. Following confirmation of rainfall shortage by the National Meteorological Agency of Ethiopia, insurance companies delivered cash to families through a mobile phone platform. Participants without phones access cash with plastic identification cards. So far, SIIPE has delivered 12.6 million Ethiopian birr (US$ 420,000) to 4,673 families, each receiving between US$20 to US$185.
SIIPE is a partnership with the Somali Regional Bureau of Agriculture and Natural Resource Development (BoANRD), Somali Regional Bureau of Livestock and Pastoralists Development (BoLPD), National Meteorological Agency, Somali Micro Finance Institution (SMFI), a pool of four Ethiopian insurance companies, and Mercy Corps.