Insurance helps herders cope with biting drought

A bird hovers over a fresh carcass in Bula-Tarasaa village in Tana River County. [Caroline Chebet, Standard]

Ibrahim Kiro has seen the worst of the drought-stricken Garbatulla sub-County in Isiolo.

Two years ago, the harsh climate claimed 14 of his goats, setting him down on a route to poverty.

And as the current drought drags on, his remaining animals are too weak, with fears that they also may die.

In a county like Isiolo where little food grows in the rocky soil, a man without livestock loses his standing in society.

And the loss of his goats, says Kiro, could not have happened at a worse time.

“This happened as soon as my son was about to join the University of Nairobi,” Kiro says in a subdued voice. “My son would still be home had the insurance people not come and sorted me out.”

Kiro is talking of the government-sponsored Kenya Livestock Insurance Programme (KLIP) launched by the Ministry of Agriculture in 2014 with support from the International Livestock Research Institute (ILRI) and the World Bank.

The public-private partnership targets vulnerable pastoralists such as Kiro whose livelihoods are entirely dependent on livestock in eight counties, namely; Isiolo, Samburu, Marsabit, Garissa, Wajir, Tana River, Mandera, and Turkana.

Pastoralists in these regions are more prone to adverse weather patterns as it is estimated that over 70 per cent of natural disasters in Kenya can be attributed to extreme climatic conditions.

While livestock contributes approximately 10 per cent of the country’s GDP, the sector suffers from droughts that recur every 10 years, erratic rainfall patterns, and floods. Between 2008 and 2017, for example, pastoralists in Kenya lost livestock worth an estimated Sh699 billion due to droughts.

The World Bank, in the 2020 Climate Risk report for Kenya says the situation will only get worse.

“The country’s large semi-arid and arid land areas are projected to see a significant decline in agricultural productivity and livestock numbers, as water resources become increasingly scarce. Increased incidence of droughts, coupled with reduced rainfall projections for the arid and semi-arid regions, is expected to reduce yields in … livestock and fisheries,” the report states.

In the insurance programme, the government creates the enabling conditions, including premium support while a consortium of insurance companies focus on insurance product development and paying claims to insured pastoralists.

The key feature of the programme is to use satellite data to map out the amount of foliage available in any given area within the arid and semi-arid lands. When foliage falls below a certain category, payments are triggered early before the pastoralists lose their animals.

When the data is cleaned, areas that fall under national parks and reserves, riverine areas, or regions where invasive vegetation abounds are removed to give an accurate figure of available foliage. “The amount paid out is equivalent to what a pastoralist would ideally use to keep livestock alive during the dry period.

In case of a cow, the sum insured is Sh14,000 with annual premiums ranging between Sh1,500 and Sh3,500,” says Siani Malama, head of inclusive insurance at APA, the lead of the insurance pool members. Others include UAP Old Mutual, Jubilee, Kenya Orient, and CIC.

One of the largest payouts to pastoralists was in 2017 when Sh750 million was paid out to pastoralists. Last week, the consortium paid out Sh16 million to more than 2,500 pastoralists in Marsabit, Garissa, Isiolo, Samburu, Wajir, and Tana River counties.

While general insurers are licensed to underwrite the agricultural and livestock sector, the Ministry of Agriculture states that by 2020, only eight companies were underwriting agricultural insurance. “The level of agricultural insurance uptake and penetration is still very low in Kenya with less than one per cent of farmers and pastoralists purchasing insurance,” states the National Agricultural Insurance Policy document.

Currently, there are 18,012 households in the programme within the targeted counties.

James Papa, the agriculture manager at APA says the location and distribution of prospective beneficiaries presents a challenge to underwriters adding that non-governmental organisation that works in these regions can either help educate the pastoralists on the insurance benefits and perhaps help subsidize the premiums.

On the other hand, Malama says that through the use of aggregators, insurance uptake will likely go up, especially with an aggressive public awareness. “You have to consider that we are dealing with a low-cost product. Having aggregators on the ground with a number of pastoralists under their control, we are able to speed up data collection while educating the public on best practices.”