New initiative to finance pastoralists to cope with climate risks

Pastoralists across Kenya are poised to benefit from the rollout of a new initiative to cushion them against drought and other risks.

The De-Risking, Inclusion, and Value Enhancement of Pastoral Economies (DRIVE) project spearheaded by the State Department for Livestock Development in collaboration with 21 county governments and the World Bank also aims to tackle the challenges pastoralists face in accessing vital financial services.
The DRIVE project was officially inaugurated in July 2023 by Deputy President Rigathi Gachagua.
The initiative comes in response to the devastating impacts of drought, with over 2.5 million livestock lost in the most recent drought cycle in 2022.

These losses underscore the urgency of enhancing disaster resilience within the livestock sector, a major component of Kenya’s economy.
“To prepare the sector against such losses, multi-sectoral approaches are needed to mitigate losses, and to derisk critical investments towards access to fodder, value additions and markets,” reads a joint statement from the Agriculture Ministry, DRIVE Kenya and the World Bank.
Principal Secretary of the State Department for Livestock Development Jonathan Mueke said the project is a critical step towards modernising risk management and strengthening financial inclusion in the livestock sector.
“The DRIVE project is in line with the government blueprint that is committed to providing adequate capital through well-managed farmer organisations and deployment of modern risk management instruments such as crop and livestock insurance schemes for profitable and predictable incomes by sector players,” said Mr Mueke.
Its strategy focuses on multiple fronts, including the introduction of financial tools such as insurance schemes and savings programmes, specifically designed for pastoralists.
Zep-Re (PTA Reinsurance Company), a leader in the African insurance sector, offers satellite-based drought livestock insurance.

These efforts are supplemented by savings incentives to encourage the building of financial reserves against future shocks.
The project has benefitted over 138,000 pastoralists in regions such as Garissa, Isiolo, and Laikipia through government-subsidised insurance premiums, savings bonuses, and claims payouts totalling more than Sh2.7 billion.

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The Kenya Development Corporation (KDC) has also facilitated Sh730 million in loans to support investments in the livestock value chain, including feed production and processing facilities.
DRIVE also focuses on integrating pastoralists into profitable value chains, thus enabling them to participate more fully in the local and international markets.

Direct distribution

One of the notable successes of this initiative is the direct distribution of Kenyan beef to supermarkets in the United Arab Emirates (UAE), bypassing the need for local partnerships and thus retaining more brand value for Kenyan products.

The project aims to expand to nine additional counties and introduce new measures to bolster the red meat and dairy sectors.

These include promoting quality flaying and preservation practices for hides and skins and doubling milk production through enhanced fodder availability and cold chain facilities.

“Previously, a big chunk of the hides and skins were being sold in raw form to West African countries as meat products for culinary purposes. The shift to using hides for leather products and by-products is now a crucial agenda item on the State Department’s list of priorities. Farmers in the DRIVE project will be trained on quality flaying and preservation of hides,” said the joint statement.

In line with the objectives of this initiative, the dairy value chain in the arid and semi-arid land (ASAL) counties will be offered de-risking tools and capital to accelerate the government’s aim of doubling milk output to 10 billion litres.