options for enhancing resilience in pastoral systems
DESCRIPTION
Presented by Shirley Tarawali, Andrew Mude, Jan de Leeuw, Mario Herrero, Silvia Silvestri and Susan MacMillan at the Brussels Development Briefing on New challenges and opportunities for pastoralism in ACP countries, Brussels, 22 February 2012TRANSCRIPT
1
Options for enhancing resilience in pastoral systems
Shirley Tarawali, Andrew Mude, Jan de Leeuw, Mario Herrero, Silvia Silvestri, Susan MacMillan
Brussels Policy Briefing no.26New challenges and opportunities for pastoralism in ACP countries
22 February 2012
Key messages Rangelands constitute the largest land use system globally, and pastoral
communities are the environmental stewards of much of these The resilience or adaptive capacity of pastoral communities, and the
natural resources on which they depend can be improved by:– Securing assets– Providing opportunities for diversification
Index based livestock insurance has the potential to counteract excessive vulnerability to drought, which will mitigate ad hoc coping strategies.
Some of the significant public development investment in post hazard drought responses could go towards subsidizing insurances to keep these affordable for the poor and to buttress pastoral livelihoods against the effects of drought
2
Rangelands and pastoral communities
Tropical arid and semi-arid rangeland based systems
population density less than 20 persons/km²length of growing period (LGP) less than 60 days/annum
no significant crop production possible
Largest land use system on earth
35 million km2 – 24% of the total land area Support 50% of the World’s livestock
200 million people depend on rangelands for livelihoods
Half live on less than $2/day
Vulnerability
Climate variability
Future climate change
Food insecurity
Conflict
Poor capacity to cope
Under investment
Market shocks
Disease outbreak
Options to improve
resilience
Increasing resilience (adaptive capacity)
9
Increasing resilience
10
Main cause of
vulnerability
Impact of Drought on Livelihoods
Cause of Livestock Mortality Component Shares of Income
• Drought is by far the leading cause of livestock mortality
• Disease and Predation likely to be directly related to drought
• Sale of livestock and livestock productions constitute 40% of household income
• External support (food and cash) make up nearly 25% of household income
Livestock Share of Productive Assets (Median 100%, Mean 49%)Data source: Project baseline 2009 (924 Marsabit Households)
Mitigating animal asset
loss
Index-Based Livestock Insurance (IBLI)•An innovative insurance scheme designed to protect pastoralists against the risk of drought related livestock deaths
•Based on satellite data on forage availability- NDVI , this insurance pays out when forage scarcity is predicted to cause livestock deaths in an area.
IBLI PILOT
•First launched in Northern Kenya in Jan 2010. Sold commercially by local insurance company UAP with reinsurance from Swiss Re
•Ethiopia pilot to be launched in Aug 2012.
Lessons and Challenges from the Pilot
It is feasible to design index-based livestock insurance contracts attractive to both pastoralists to individually purchase and to commercial financial institutions that must market, sell and underwrite the products
– Pastoralists bought the insurance– Commercial Insurance Company, Insurance Agent and Reinsurance company
involved
There appears to be considerable demand for IBLI– More than 3,000 pastoralists have purchased the IBLI contract– More than 600 of them receive indemnity payments after the drought in
October 2011
Extension for informed decisions: Creative education tools can help pastoralists to rapidly grasp the IBLI concept.
14
Lessons and Challenges from the Pilot Cost effectiveness and density
of delivery channels is critical for success and commercial viability.
– Successive improvements in ICT infrastructure has been used for product delivery - premium collection and indemnity payments – leading to generalized market development
Private-Public Provision– Challenges in the varied
incentives of private partners stressing copyright and profit and partner public institutions (such as ILRI) interested in identifying, testing and scaling innovative solutions that leverage the market to enhance livestock related-livelihoods of the poor
15
The Case for Public Provision Development agencies and governments spend a lot of resources
on drought response activities IBLI:
– proactive market approach to complement reactive drought expenditure– contribute to shifting the paradigm from response to development.– social safety net securing the productive assets of these vulnerable
populations
ILRI has in place a rigorous impact assessment study on the social and economic welfare impacts of IBLI that will help the efficient targeting of public investments for livestock insurance.
Most agricultural insurance programs receive subsidies:– US agricultural insurance program – Farmers only pay 40%
of the actuarially fair premium.– India, with one of the worlds largest index-insurance
programs in the world provides a 50% subsidy to farmers.
16
Key messages Rangelands constitute the largest land use system globally, and pastoral
communities are the environmental stewards of much of these The resilience or adaptive capacity of pastoral communities, and the
natural resources on which they depend can be improved by:– Securing assets– Providing opportunities for diversification
Index based livestock insurance has the potential to counteract excessive vulnerability to drought, which will mitigate ad hoc coping strategies.
Some of the significant public development investment in post hazard drought responses could go towards subsidizing insurances to keep these affordable for the poor and to buttress pastoral livelihoods against the effects of drought
17
Thank youwww.ilri.org/ibliwww.ilri.org