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Insurance only way to guard against weather-gone-awry phenomenon

By Andrew Mude | Published Fri, April 28th 2017 at 12:26, Updated April 28th 2017 at 12:37 GMT +3
President Uhuru issued payments to 2,500 households under the Kenya Livestock Insurance Program (KLIP)PHOTO:COURTESY

Somewhat lost in the politics of President Uhuru Kenyatta’s visit to Lodwar last month was the official purpose of his visit: the issuance of livestock insurance payouts triggered by the country’s ongoing drought. That was a shame. We should be focusing our energies right now on alleviating the suffering of herders in Kenya’s arid north.

We already have a promising path forward to mitigate the crisis. That day in Lodwar, President Uhuru issued payments to 2,500 households under the Kenya Livestock Insurance Program (KLIP). Currently covering 14,000 households across the arid and semi-arid land (ASAL) counties of Mandera, Marsabit, Isiolo, Tana River, Turkana and Wajir, this progressive Kenya Government insurance programme triggered a total of Sh215 million in payments to 12,604 recipient households.

That was really good to see. But it’s not nearly enough. Over 3 million herding households in Kenya depend on livestock as a key source of income and nutrition. For these Kenyan herders, drought is an ever-present risk, accounting for more than 75 per cent of their livestock losses. All of these many herding families, could, and should, benefit from the insurance coverage offered under KLIP.

Index-based livestock insurance is a cost-effective way to manage the risks pastoralist herders face. This innovative product, which uses satellites to monitor drought conditions and triggers payments in the event of severe forage scarcity, was launched as a pilot in Marsabit in 2010. It is led by a consortium of partners, spearheaded by the team I oversee at the Kenya-based International Livestock Research Institute (ILRI).

The Kenya Government, through its State Department of Livestock, should be applauded for its commitment to expand coverage through KLIP. But only a small fraction of affected households are currently covered. We urgently need to expand this program to more households because we know droughts will continue to afflict this region. And we also know that under climate change, droughts are likely to occur here even more frequently in future.

A rapid appraisal of households across Marsabit by ILRI researchers in March found that pastoralists have lost an average of 40 per cent of their herds this season, and most of Kenya’s arid counties are experiencing a similarly severe scarcity of forage. The consequences of this loss are stark, some more immediately recognised than others.

In recent weeks, we have witnessed desperate herders forcing their way onto private ranches to find grass for their animals, armed to protect the only productive asset they have – their livestock – to support their families. Even as government and development agencies scramble to respond to the crisis, many of their chosen interventions have been delayed or are insufficient; and most are costly.

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The result is a significant drain on local and national economies. For example, the droughts that hit Kenya in 2009 and 2011 caused an estimated $12 billion in losses to the economy, of which 70 per cent was due to livestock sector losses alone.

We can see the cost of this tragedy in people’s loss of livelihood and dignity. We can see the cost in their hunger and malnutrition, particularly for young children, for whom the costs of such early malnutrition endure throughout life, reducing their cognitive abilities and productive contributions to society.

Offering insurance to more herding families is part of the answer. The government needs to increase funding to KLIP and put in place transparent policy and operational frameworks that can help catalyse investment from the increasing number of private insurance companies and other commercial service providers interested in partnering with this insurance programme.

To ensure sustainability, the government should consider partially subsidising the insurance premiums of all interested buyers rather than, as at present, paying the full premium amounts for a very small selected group of herders.

We also need better collaboration between our national and county governments, which are typically the first to respond to emergencies. County governments can help raise awareness of insurance programs and ensure they are appropriately targeted and customised to the needs of their communities. They can also provide complementary funding to encourage their constituents to take out the insurance policies.

To this end, the national government should solicit formal commitments from county governments to support KLIP. Livestock insurance is no panacea. It needs to be combined with other proven support programs for dryland peoples, such as cash transfers to the poorest households and graduation programs that promote entrepreneurship.

As we grapple with the consequences of the current drought, the Kenyan Meteorological Department is forecasting another season of below-average rainfall. This paints a worrying picture for our pastoral communities.

We have seen bipartisan support for KLIP, and its recent successful payouts prove its value to Kenyans. As political rancor builds ahead of Kenya’s presidential elections, this is one program that all political parties and constituencies can and should support. I commend the concrete progress made by the current Government under the Kenya Livestock Insurance Programme. Let’s build on this momentum and scale up this livestock insurance across all our arid lands.

Mr Mude is a principal economist at the International Livestock Research Institute (ILRI) and the 2016 Norman Borlaug Field Award recipient. He is a 2017 Aspen Institute New Voices [email protected]

 


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