Weather Insurance

It is often difficult for commercial insurance companies to reach poor people living in rural areas. High administrative costs, lack of historical weather data, the farmers' lack of understanding of the insurance industry, and the physical distance that exists between the insurers and the farms themselves often create barriers between companies and communities. To reduce these barriers and to facilitate developing communities' access to formal insurance, Oxfam has partnered with Swiss Reinsurance, Ethiopian farmers on the ground, the Relief Society of Tigray, the International Research Institute for Climate and Society, Nyala Insurance, and over a half dozen other organizations to launch a climate change resiliency project called "Horn of Africa Risk Transfer for Adaptation" or HARITA.

Started as a pilot in Ethiopia in November 2007, the program addresses the needs of small-scale farmers through drought insurance, credit, and risk reduction. Within the HARITA risk management package, insurance supports disaster risk reduction and long-term, sustainable investments in agriculture.

The program works in the following ways:

• Giving poor farmers access: 85 percent of Ethiopians are employed in farming. Many of them, however, cannot afford what other insurance companies offer. HARITA is made available to farmers from all economic backgrounds by allowing them to exchange their labor for insurance. Farmers have the option to work on community projects, such as planting trees or constructing a water harvesting structure, to pay for their premiums. HARITA has been able to reach and better prepare many more individuals by simply making the insurance more available.
• Educating farmers about disaster risk reduction: HARITA is working to educate communities about methods to minimize vulnerability while improving economic growth in order to increase farmers' resiliency to the effects of climate change. For example, as average temperatures rise, HARITA has introduced communities to more heat-tolerant crops, helped them reschedule planting dates, and helped improve their management of water resources. In 2009, farmers learned how to make and use compost, construct small-scale water harvesting structures on farmland, plant trees and grasses to reduce erosion and promote soil and water conservation, and clean seeds in order to increase productivity. Through the implementation of these risk reduction activities, communities and individuals are more prepared to face and respond to unexpected changes in the climate.
• Engaging farmers in project design: Oxfam believes that projects are often most effective when communities are actively involved. Recipients of HARITA's insurance are central to the design and evaluations of the package. A team of five community members, elected by their peers, formed the "Pilot Design Team," which offers regular feedback, critiques, and ideas on how to improve the insurance package. In order to avoid focusing the project on only the companies' interests, group discussions with farmers are conducted to explore the specific needs of the individuals and their communities. In fact, during a focus group, farmers suggested the idea to enable the poorest farmers to pay for insurance in other forms than cash.

By focusing on building resiliency at a community level, HARITA has provided farmers with the education and tools to create stable and prosperous livelihoods—even while confronting the effects of climate change. Today, that program has grown to become Oxfam's Rural Resilience Initiative, or R4. It is helping farmers find ways to save, to improve vital resources, to get access to credit, and to purchase weather insurance designed to protect their most fundamental investment: their harvests.

Read more about the program.