Herders in drought-stricken northern Kenya get first livestock insurance payments

Education on livestock insurance

Pastoralists from Marsabit, in Kenya’s remote northern drylands, play a game crafted by ILRI scientists to simulate livestock losses that could occur due to drought, in which the local herding communities are educated about how index-based livestock insurance works (image credit: ILRI).

As livestock deaths mount, a small group of herders in Kenya’s Marsabit District is first to benefit from program that tracks forage conditions via satellite.

In the midst of a drought-induced food crisis affecting millions in the Horn of Africa, an innovative insurance program for poor livestock keepers is making its first payouts today, providing compensation for some 650 insured herders in northern Kenya’s vast Marsabit District who have lost up to a third of their animals.

Known as index-based livestock insurance, or IBLI, payouts are triggered when satellite images show that grazing lands in the region have deteriorated to the point that herders are expected to be losing more than 15% of their herd. The current readings for which indemnities are now being paid show that between 18 and 33% of livestock have been lost to drought this season.

‘It’s terrible that we are seeing this level of loss, but gratifying that the policies are doing what they are supposed to do, which is to help herders avert disaster when weather conditions dry up pasture lands and animals begin to perish,’ said Isaac Magina, head of agriculture insurance at UAP Insurance Ltd.

‘When you look at a 33% loss, that is a significant portion of the asset base of any business and it would be difficult to survive without insurance,’ added Magina.

The insurance project was developed in partnership by the Nairobi-based International Livestock Research Institute (ILRI), Cornell University and the Index Insurance Innovation Initiative program at the University of California at Davis. Commercial partners Equity Bank and UAP Insurance Ltd implement the program. The IBLI project is funded by the United States Agency for International Development, the European Union, the British Government, the World Bank, the Microinsurance Facility and the Global Index Insurance Facility.

The Marsabit District alone is home to some 86 thousand cattle and 2 million goats and sheep that generate millions of dollars in milk and other products and serve as the main source of sustenance and income. ILRI estimates that up to one-third of all livestock in the region have perished during the current drought.

In East Africa, an estimated 70 million people live in the drylands, and many of them are herders. In Kenya, the value of the pastoral livestock sector is estimated to be worth USD800 million. And the Intergovernmental Authority on Development in Eastern Africa, which takes a regional approach to combating drought in six countries of the Horn, estimates that over 90% of the meat consumed in East Africa comes from pastoral herds.

Under the terms of the policy, insured herders are compensated for any losses above 15%, with the 15% threshold acting as a sort of deductible. For example, a cattle herder who lives in an area with a livestock mortality rate of 33% receives a payout covering 18% of his or her animals. With cattle valued at about 15,000 Kenyan shillings (Ksh) per head (about USD150), an insurance policy covering 10 animals, or Kshs150,000 in cattle, would pay out at about Kshs27,000 (about USD270).

When the 15% deductible is factored in, compensation ranges from 3% in areas where the drought has been more moderate to 18% in the areas where herders were hit particularly hard. But in an indication of the severity of the drought, all of the areas where the policies were sold have exceeded the 15%mortality threshold that triggers a payout. Thus far, the policies cover about 1,100 animals—mostly cattle, but some goats and sheep and a few camels as well.

The payments are being dispatched in the middle of a humanitarian crisis endangering 12 million people in the Horn that is prompting a call for new ways to manage food security risks in East Africa’s arid drylands. For example, a recent report from ILRI has found that the pastoral approach to livestock production, in which herders make do with marginal lands by regularly moving their herds, could be very effective at averting weather-related food shortages. ILRI experts say that in arid and semi-arid regions, keeping livestock can be a more effective coping strategy than cultivating crops—if herders have options for reducing their vulnerability to drought.

‘Drought insurance is one important way to help livestock keepers maintain food security even in very harsh environments,’ said Andrew Mude, the IBLI project leader at ILRI. ‘Insurance is not by itself sufficient,’ he added, ‘But if it is accompanied by other risk-reducing strategies, such as better access to grazing lands and watering areas, then the pastoralist approach, which some people dismiss as a backward lifestyle of the past, emerges as a very effective way to meet future food needs.’

Mude said that it is too early to tell just how the payouts from the policies will affect food security and other welfare indicators. For example, it’s not yet clear how many herders will use the compensation to replace animals lost to the drought. But Mude said one major success thus far is that the livestock mortality index that is at the heart of the program appears to be working. The fatality rate predicted by the satellite assessments of forage loss is tracking very closely surveys of animal deaths on the ground.

That’s crucial because using freely available satellite images of pasture lands to accurately predict animal deaths overcomes a major barrier that has bedeviled past efforts to provide livestock insurance in poor regions: the prohibitively high costs and logistics of confirming animal deaths in herds that roam across vast distances in extremely remote areas.

‘This is all still a work in progress,’ said Jimmy Smith, director general of ILRI. ‘But the fact that our relatively inexpensive approach to estimating livestock deaths seems to be accurate could open the door to making livestock insurance widely available in many parts of Africa.’

Going forward, experts believe a key issue will be whether livestock insurance in East Africa would be commercially viable by itself or whether its ability to protect herders from the impact of prolonged drought might justify some level of financial support from governments or donors, as agricultural insurance programs in Western countries often do.

‘This is asset insurance for animals that are the centerpiece of livelihoods, providing a stream of income and nutrition for years and years,’ said Mude. ‘The investment in insurance=based asset safety nets protecting these herds could have a more cost-effective welfare impact over the longer term than other forms of response such a food and cash assistance.’

‘This insurance scheme is a great example of how partnerships with the private sector can lift people out of poverty and provide long-term solutions to food crises,’ said Andrew Mitchell, the British international development secretary.

‘To many farmers, losing their cattle means losing everything, as they are not just a source of income but are their only source of food. Support from Britain and others means that more than 600 herders in Northern Kenya can buy more cattle to replace those they have lost. This means they are better able to cope with this and future devastating droughts.’

Experts produce joint statement on long-term development needs of the drylands of the Horn

Ethiopische nomadevrouw met haar dochter

Ethiopian pastoralists of Somali origin have been trying to sustain their livestock livelihoods after some of their land was used to build a camp for Somali refugees at Dolo Ado, Ethiopia (photo on Flickr by Petterik Wiggers/Hollandse Hoogte—Photostream Giro 555 SHO).

The Africa Union’s Interafrican Bureau for Animal Resources (AU-IBAR) recently convened a two-day consultation of experts working to address the challenges to development of the arid and semi-arid lands of the Horn of Africa. This expert consultation on ‘Interventions for sustainable livestock systems in the Horn of Africa,’ was held 2–3 Sep 2011 at the International Livestock Research Institute’s headquarters, in Nairobi, Kenya. The AU meeting was preceded by a news briefing and learning event convened by the CGIAR Consortium of International Agricultural Research Centers. CGIAR CEO Lloyd Le Page participated in both the Consortium and AU drought-related meetings.

Both meetings helped to identify opportunities for sustaining food production in this sub-region, which continues to suffer from the catastrophic impacts of a severe drought, and helped to develop an initial framework for making better use of those agricultural opportunities in future.

The more than 40 experts gathered at the AU meeting developed a joint statement to better inform long-term development of this region’s drylands. This statement, which follows in full, will be used at upcoming high-level meetings on topics related to food security.

Expert Consultation to inform long-term development of arid and semi-arid lands in the Greater Horn of Africa

2–3 September 2011

A Joint Statement

Preamble
The current food security crisis in the Greater Horn of Africa is a stark reminder that insufficient attention has been given to addressing the root causes of vulnerability in the arid and semi-arid lands (ASALs) of this region. It is also apparent that it is not drought but rather vulnerability during drought in the ASALs that has thrown the region into repeated food crises. Yet in contrast to this vulnerability is the fact that the ASALs produce most of the livestock traded in the region, contributing up to 50% of agricultural GDP to the national economies, in addition to playing wider economic roles. African leaders at the country, regional and continental levels, along with global leaders and the development community, are now confronted with, and attempting to address, the questions: why do we continue to regard what is so clearly an asset as a liability; and what would an appropriate long-term development program look like that could sustainably harness the productive potential of the ASALs and reduce repeated crises?

In the next several months, numerous technical and political consultations are planned to discuss short, medium and long-term development in the ASALs. Against this backdrop, and the urgency of tackling this challenge head on, the African Union (AU) through its Interafrican Bureau for Animal Resources (AU-IBAR) convened an expert consultation 2–3 September 2011 in Nairobi, which was hosted by the International Livestock Research Institute (ILRI), a center of the CGIAR Consortium.

The consultation brought together over 50 development practitioners, researchers, and policy makers (from non-governmental organizations, government, regional organizations, international research institutes, and development agencies) from the Greater Horn of Africa and globally that are or have been engaged in addressing the challenges to the development of the ASALs.

This statement is a summary of key trends identified and recommendations of the experts. It also provides a summary of outcomes, illustrative interventions and issues for consideration.

Context and Trends

Context

  • ASALs account for 70% of the land area of the countries in the Greater Horn of Africa.
  • ASALs are a discrete geographic area in the Greater Horn of Africa where the population is vulnerable.
  • The shared agro-ecosystem, including natural resources such as water and pastures and common production systems, offers an opportunity for cooperation among countries to identify and implement solutions.
  • Pastoral and agro-pastoral livestock production systems are the primary economic enterprise and main economic driver in the ASALs.
  • There are now a large number of activities being implemented at country and local levels to help mitigate the impacts of drought and to build household and community resilience in an environment of increasingly unpredictable rainfall.
  • Social, technical and economic services are not widely available, especially to the mobile pastoral populations, and the longer-term development needs of the ASALs are generally neglected.
  • Insecurity in the region exacerbates vulnerability and hinders effective response and other interventions.

Important trends

  • The region is experiencing an increased number of shocks, especially more frequent droughts and floods, but also man-made shocks.
  • Although the long-term impacts of climate change cannot yet be accurately predicted, there appears to be increased variability of rainfall; and although many experts believe the region will become progressively hotter and drier, some parts may become wetter and more flood-prone.
  • There are growing opportunities for international/regional trade in livestock products due, in large part, to the increased demand for these products in Africa and the Middle East fuelled by growing populations, urbanization and rising incomes.
  • While access to services remains generally poor in the ASALs, significant progress has been made recently through greater access to, and coverage by, mobile phones.
  • Country strategies and investment plans are in place, but ASAL programming, although it is included, is not prioritized, coordinated or well developed.
  • Ongoing processes of land fragmentation, insecure tenure and use rights, and externally driven land appropriation processes also undermine pastoral productivity.
  • Improved research coordination and frameworks are already in place[1] but need to be leveraged to support the ASALs.
  • Policy windows of opportunity are emerging nationally and regionally, and the political voice of pastoralists is increasing.

Strategic Actions and Recommendations
The immediate challenges being faced in the Greater Horn of Africa serve as a call to action that is being heard and responded to by many countries, agencies, and interest groups. The immediate attention to saving lives and protecting livelihoods is indeed critical. However, much of this response, especially the efforts focused on long-term development, could make better use of existing systems, evidence and best practices to inform investment. They are too often partial solutions because no single country or agency has the ability to mobilize the resources or political will to operate at the scale needed to systemically tackle the issues. Recognizing the need for coordinated action, two recommendations are summarized below to advance a more effective mobilization of domestic resources and foreign development assistance in support of a long-term development effort.

1. The African Union should establish a task force to assist countries and regional economic communities (RECs) to design and mobilize support for long-term development of the ASALs in the Greater Horn of Africa. The fundamental task is to translate national strategies and investment plans for agriculture and food security that now exist into concrete activities and services. This will require:

  • Analysis to help inform and clarify the expected outcomes and targets from the investment in ASALs on the national agriculture and food security goals and targets, articulated through their CAADP Plans.
  • An inventory and review of ongoing efforts in the ASALs, identify best practices and modalities or instruments to consolidate ongoing efforts, align them with long term goals and targets, and scale up the best practices.
  • Strategic coordination of research and technical support to assist national coalitions of government, development partners, NGOs and the private sector to prioritize various interventions for the ASALs.
  • Development of partnerships to support and implement high-priority policy recommendations, and research, development and economic growth projects and activities.
  • The review of options for establishing an implementation framework at the national and regional levels that provides effective coordination, and that clarifies the roles and responsibilities of various parties in the implementation of a coordinated investment strategy for ASALs.
  • The task force is envisaged as a temporary measure with a lifespan of around 6 months: an important task during this period will be to identify a more sustainable platform to provide ongoing effective coordination to support long-term development of the ASALs of the Greater Horn of Africa.

2. The international community and bilateral development agencies should mobilize a consortium of technical organizations, e.g. CGIAR, FAO, WFP and NGO partners (e.g. REGLAP) to work with and support the AU task force in close consultation with the concerned countries to identify best practice, develop programs, provide technical services and conduct relevant research to support long term development of the ASALs.

Illustrative Outcomes and Interventions for Long-Term Development of ASALs
The expert consultation identified key challenges that a long-term development effort in the ASALs will face, considered major outcomes that will need to be pursued, and began to examine best practices that have been developed and are being applied, typically on a small-scale basis, that could be helpful in the long-term development of the ASALs. The expert consultation considered possible outcomes and actions for long-term agenda from the lens of: a) increasing the contribution of the ASALs to agricultural growth and national development goals and targets; and b) diversifying livelihoods and improving resilience amongst vulnerable households in ASAL areas of the Greater Horn of Africa.

Six major outcome areas and related illustrative interventions are considered as key in advancing the long-term development of the ASALs. They include the following.

Make national and regional pastoral policy frameworks operational

  • Define and elaborate ASAL programmes within the umbrella of the CAADP investment plans that are consistent with the AU policy framework for pastoralism and other regional initiatives, such as the IGAD regional policy framework on animal health in the context of trade and vulnerability
  • Promote regionally harmonized policy on livestock trade and the movement of livestock and people
  • Capacity strengthening of RECs, national and local agencies coordinating and implementing ASAL development where and as appropriate and requested
  • Effective monitoring and evaluation of policy implementation

Sustainable ecosystem management

  • Integrate local knowledge through participatory action research so as to ensure that strategies fit with local perspectives and priorities
  • CGIAR mentoring of national agricultural research services in applied research in ecosystem dynamics
  • Develop payment systems for environmental services that benefit pastoralists
  • Facilitate carbon sequestration and methane emission reduction
  • Enhance the use of natural resource (e.g. improved land-use planning; and water and soil management efforts.)

Secure regional trade

  • Inter-regional financial systems
  • Product standardization linked to SPS measures
  • Enhanced negotiation capacity
  • Reduced non-tariff trade barriers
  • Niche market development
  • Improved road, market, water and communication infrastructure

Institutionalized disaster-risk management and response

  • Assess need for early-warning systems for different stakeholders
  • Develop demand-driven knowledge products
  • Improve dissemination of early-warning information using alternative media
  • Invest in data management systems
  • Establish functional mechanisms for early response
  • Fund early response, especially at local levels, within a conducive policy and institutional setting
  • Provide safety nets
  • Provide index-based livestock insurance
  • Enhance traditional coping strategies

Empowered pastoralist communities

  • Strengthened producer associations
  • Conflict resolution – grazing, land access, environment
  • Strengthened traditional NRM strategies
  • Increased awareness of improved coping measures, such as timely destocking
  • Increased community participation in policy decisions and resource allocations
  • Capacity development for community driven development in government and at community level
  • Vocational training in technical and business skills
  • Social fund for cost-shared community-driven investments

Improved and alternative incomes

  • Effective community-based animal health services
  • Effective veterinary epidemiology program
  • Competitive private input supply
  • Secure access to land and water
  • Development of irrigation
  • Dryland products such as resins and gum arabica
  • Savings-driven credit schemes
  • Information-technology-based market information
  • Vocational training in technical and business skills
  • Basic numeracy and literacy
  • Energy and environmental services

Next Steps for Catalyzing Action
Recognizing the urgency of the situation, it is proposed that the African Union convenes a broadly based task force immediately, drawing on the rich expertise available within the region, continent and globally.

At the same time this joint statement should be distributed to other stakeholders, including the donor community, engaged in technical and political consultations over the next few weeks and months, with a view to mobilizing a coordinated effort to shape and implement a long-term development program to tackle the underlying causes of vulnerability in the ASALs of the Greater Horn of Africa.


[1] Newly approved CGIAR Research Programs, in partnership with national research institutes and other stakeholders, have the capacity to identify information and knowledge gaps, and provide research and innovation fundamental to the ASALs finding lasting and viable solutions, and to provide improved food security, reduced poverty, enhance nutrition and health, and more sustainable use of natural resources for the Greater Horn of Africa region.

Read more about these meetings on the AU-IBAR website and on the ILRI News Blog:

‘Africa’s drylands are productive, and potentially very productive’–ILRI’s Bruce Scott

CGIAR media briefing on the food crisis in the Horn of Africa: A strengthened and joined-up approach is needed

CGIAR briefing on the food crisis in the Horn of Africa: 1 September at ILRI Nairobi

Investments in pastoralism offer best hope for combating droughts in East Africa’s drylands–Study


Investments in pastoralism offer best hope for combating droughts in East Africa’s drylands–Study

The camels road

Camels walk from Somalia to Nairobi, Kenya (photo on Flickr by Matteo Angelino).

As hunger spreads among more than 12 million people in the Horn of Africa, a study by the International Livestock Research Institute (ILRI) of the response to Kenya’s last devastating drought, in 2008–2009, finds that investments aimed at increasing the mobility of livestock herders—a way of life often viewed as ‘backward’ despite being one of the most economical and productive uses of Kenya’s drylands—could be key to averting future food crises in arid lands.

The report, An Assessment of the Response to the 2008–2009 Drought in Kenya, suggests that herding makes better economic sense than crop agriculture in many of the arid and semi-arid lands that constitute 80 per cent of the Horn of Africa, and supporting mobile livestock herding communities in advance and with timely interventions can help people cope the next time drought threatens.

The authors say that recommending that most livestock herders switch to farming crops or move to cities is simply unrealistic in this region’s great drylands, which will not support row crops without extensive irrigation, which is scarce and often impractical. An estimated 70 million people live in these drylands, and many of them are herders. In Kenya, the value of the pastoral livestock sector is estimated to be worth USD800 million. And the Intergovernmental Authority on Development in Eastern Africa, which takes a regional approach to combating drought in six countries of the Horn, estimates that over 90 per cent of the meat consumed in East Africa comes from pastoral herds.

Drylands in the Horn of Africa are too large to ignore,” says Jan de Leeuw, an ecologist at ILRI and a lead author of the drought report. “With only 20 per cent of Kenya’s land suitable for arable crop production, and with an expanding population, the country cannot continue ignoring these dry areas without hurting people’s food production and livelihoods. Some of the worst impacts of the drought can be avoided if the region’s dryland livestock systems are well regulated.”

The best way to prevent famine in arid lands is to ensure herder access to critical dry-season grazing and watering areas. All the herders interviewed in this research assessment reported that obstacles to the movement of their herds—caused by lack of roads, land conflicts and demographic pressures—constituted the largest problem they had in protecting their animals and livelihoods.

Thus, the ILRI study findings reinforce what others have found—that migratory herding is the most productive use of much of this land.

A second major problem was a dearth of functioning commercial livestock markets. Destocking—where herders sell off those animals they can no longer feed or water to the government—does not work where there are no dynamic livestock markets. Thus, during droughts, it is more helpful for local government agencies to organize the slaughter of excess cattle on site—paying herders for the fresh meat, and giving the meat to the local herding communities to consume—than it is to ship large amounts of hay or other fodder to drought-struck areas, or to try to transport cattle out of such areas.

The authors found that investments such as better roads, markets, information access, agricultural outreach and schemes that pay herders for wildlife conservation and other ecological services may cost money in the short run, but in the longer term will help stabilize dryland communities and prevent famines.

In general, the ILRI report found that the response to the 2008–2009 drought, while better than that for a major drought a decade earlier, was still too little, too late.

The report was funded by the European Union to help Kenya improve its drought management system. Since 1996, with support from the World Bank and the European Union, the country has been moving to improve drought management through a national arid lands management program. Still, the 2008–2009 drought was devastating; more than half of all livestock died in many districts. The loss of livestock assets in successive droughts has had the effect of steadily impoverishing many herders in Kenya and other countries of the Horn of Africa.

To harvest the economic and other potential of Kenya’s drylands, we need new approaches and effective models for managing risk and promoting sustainable development, especially in the face of climate change and increasing droughts in many areas, said de Leeuw. Investments in pastoral livestock systems and markets, and in transportation, communication and energy infrastructure, is vital, he said.

The best way to tap into the potential of the drylands is to invest in systems that support pastoral livelihoods, rather than ignoring them and hoping they go away,’ said de Leeuw. ‘While such investments are risky, these areas support most of the animal protein consumed by the residents of the Horn countries.’

Unfortunately, however, drylands and the pastoral livelihoods they support have long borne the brunt of underdevelopment, underinvestment and ineffective government policies that have tended to encourage mobile herders to transit into more settled ways of life. Many dryland regions lack the infrastructure and services that would help people cope with the hazards of climate change, variable rainfall and droughts. These and other factors are partly responsible for the Horn’s recurrent hunger crises.

Furthermore, high population growth is putting pressure on agricultural farmland and urban centers in the Horn of Africa. More people (including non-pastoralists) are settling the drylands, as they are the frontier for agricultural expansion, said Polly Ericksen, another co-author of the ILRI paper. ‘The resulting sub-division and development of communal lands raises concerns about the management of Africa’s drylands, highlighting the need for national policies on how such lands are used.’

One successful national program, for example, helps provide income to pastoralists, while at the same time preserving the ecosystems. Kenyans herders who live near the country’s protected wildlife areas are receiving payments for managing their ecosystems, and these payments are providing a stable, reliable and predictable source of income that both reduces poverty and protects wildlife.

Such ecosystem protection efforts are going on in the Masai Mara region of southern Kenya and in the Kitengela rangelands near Nairobi, where Maasai people have formed ‘eco-conservancies’ to protect their grazing areas for livestock and wildlife alike.

Read more about the ILRI drought assessment on the ILRI News Blog: Best ways to manage responses to recurring drought in East Africa’s drylands, 7 Aug 2011.