More than 6 million farmers across the country grow teff, but it’s here, in rugged Adi Ha, where rocks litter the fields like confetti, that this new kind of insurance may take root and spread. An initiative coordinated by Oxfam America and supported by more than a dozen partners, its goal is to help some of the world’s poorest farmers bounce back when drought destroys their crops. And the payout isn’t only in cash. It’s in confidence—the kind that may help propel people out of poverty.
“Without insurance, poor farmers who experience drought might run through all their savings, fall into debt, or sell their livestock and other valuables—often to ruinous results,” says Mengesha Gebremichael, the micro-insurance officer at the Relief Society of Tigray and one of the project’s managers. “In contrast, insured farmers will be more resilient to those shocks. They’ll be in a better position to take out small loans that could help them make big improvements in their next harvest—loans for things like high-yield seeds. They’ll be more confident that they can pay the money back knowing they have insurance to support them if trouble strikes.”
June to October marks the main rainy season in Adi Ha, a critical time for local farmers who depend on the skies to water their teff fields. For poor families living close to the edge, where even a $20 or $30 loss can push them over, there is no room for mishap. Without rain, they face disaster. That’s where the weather insurance comes in. If a certain amount of rain fails to fall at a certain time, farmers who have purchased the insurance can receive a payout to help cover their losses.
In Ethiopia, families have always had traditional ways of coping with extraordinary expenses. If they lose their livestock in a disaster, such as drought, those who are better off will contribute an animal or two to help them rebuild their herds, for instance. Families may also share seeds for planting, or food when it’s in terribly short supply.
But with climate change—and the erratic weather that it brings—the traditional means of surviving bad times may no longer be enough.
“Climate change is dramatically increasing agricultural risk across the planet,” says Marjorie Victor Brans, a senior policy advisor at Oxfam America. “The frequency of droughts and other shocks in Adi Ha is likely to increase, and poor farmers will be among the hardest hit. It’s a hugely challenging phenomenon.”
With 85 percent of Ethiopians employed in farming, much of it rain-fed, the need for new tools to manage the risks is huge. But the market for insurance is miniscule: only about 300,000 people in a country of nearly 80 million now have it. Extending the option to rural areas is loaded with challenges, not the least of them being the concern that poor farmers simply don’t have the money to pay for premiums—even the smallest one.
This new program has solved that problem with a simple solution: It has arranged for the poorest farmers to use their labor to buy insurance, tapping into a new social security initiative the Ethiopian government launched a few years ago. Called the Productive Safety Net Program, or PSNP, it helps about 8 million of the country’s most vulnerable residents by providing them with food or cash in exchange for work. Through the PSNP, 130 Adi Ha farmers are now working extra days on community projects, such as planting trees and grasses to promote soil and water conservation, to pay for their premiums. In this pilot year, Oxfam provided funds to the PSNP to cover this part of the project.
The option to trade labor for insurance has substantially boosted the number of farmers able to participate in the program, nearly doubling the enrollment that was expected.
“It’s good for me to have the insurance as long as I can work and pay with labor,” says Medhin Reda, a single mother who will be working 24 days for her premium. “That is the only asset I have.”
For Selas Samson Biru, who is spending 192 birr on insurance, it will help address the uncertainties that have always been part of farming, especially now that global warming may be altering familiar weather patterns.
“Our season is changing. We don’t know when there will be a bad year and when there will be a good year,” she says. “I believe, after taking the training, this insurance will be helpful during the bad season. This will pay me.”
And the insurance may be extra helpful because it was tailored specifically for farmers like Biru. In fact, she was one of five community members chosen by villagers to join the insurance design team. Twenty-one other farmers participated in a series of test workshops on climate change and financial literacy. Focus group discussions and economic risk simulations carried out in the community helped the design team understand what kind of insurance product would work best in Adi Ha. And on the day of enrollment, about 600 farmers showed up for a host of activities explaining the offerings, including musical performances, a play, peer-to-peer outreach, and financial training.
“Today is a historic day for the farmers of Adi Ha,” said Brans as the activities wound to a close that day and organizers counted the final tally of takers. Among the 200 were 75 women, which represents about 22 percent of all female-headed households in Adi Ha—one of the most vulnerable groups the project is aiming to help. On average, farmers are paying 138 birr for their premiums—or a little more than $12 each. Some chose packages that allowed them to pay as little as 76 birr, or about $6.75. The maximum premium was 288 birr, or just over $23.
“We are experimenting,” said Gebru Kahsay a few months after investing 192 birr into an insurance package. “We started with teff. If we find the insurance is good, we’ll continue. If we fail, we will take a lesson from it.”
Lots of learning has already taken place during the 18 months Oxfam and its partners spent in preparation for the launch of this project. And each of those partners has been contributing its own expertise. Besides the Relief Society of Tigray, or REST, one of the largest aid groups in Africa which has worked closely with the people of Adi Ha, other partners include the Nyala Insurance Company, an Ethiopian firm that is providing the insurance; Swiss Re, one of the world’s largest insurers which has helped fund the launch and is providing technical expertise; and the International Research Institute for Climate and Society at Columbia University, which is providing research on climate data. Additionally, the Dedebit Credit and Savings Institution, or DECSI, the primary provider of loans to families in Adi Ha, helped both to design the pilot and to educate farmers about the pros and cons of insurance.
“We had to work very hard to design a risk management package that was affordable and attractive to farmers, while still being potentially profitable to the insurance industry,” says Bekabil Fufa, an agricultural expert in Oxfam America’s Horn of Africa regional office. “And we had to make it compelling to government and donors who feel it will address the threat of climate change.”
With a solid model now in place, Oxfam is planning in the coming year to expand the initiative into four new villages in Tigray--the region where Adi Ha is located—and into one village in Amhara, another drought-prone region to the south. Eventually, the project partners would like to see weather insurance offered to poor farmers throughout Ethiopia.
It will require a leap of faith by farmers across the country as well as support from the government, donors, NGOs, and the private sector,” says Gebremichael. “But given the long lead times required to build resiliency to climate change, we can’t afford to wait until tomorrow to try.”
]]>"When a cyclone hits, it means you can lose everything," said Khan, Oxfam America's humanitarian response officer in East Asia. "Rich and poor alike."
The entire coastal zone is prone to violent storms and tropical cyclones between April and May—before the monsoon season starts—and again in October and November, when the monsoon has ended. Khan estimates that cyclones have killed nearly one million Bangladeshis since 1820. In 1970, one event alone took about half those lives. With a storm surge topping 30 feet, that November 12th cyclone killed 500,000 people and more than one million heads of cattle.
The disaster pushed the United Nations to ask the International Federation of Red Cross and Red Crescent Societies to develop an early warning system for the country, said Khan. The result was the establishment of the Cyclone Preparedness Program, a community-based volunteer organization that provides early warning to people, and then helps with relief work and first aid after the storms hit.
But 21 years after the deadliest storm in Bangladesh's history, another devastating cyclone struck the country in late April, 1991, killing 138,000 people. It was at that point, said Khan, that Bangladesh began to look seriously at the steps it could take to help people prepare for the inevitable.
At the urging of aid groups and the donor community, the government of Bangladesh began to shift its emergency response programs to focus more heavily on preparedness. When Cyclone Sidr struck a few weeks ago in mid-November, evacuation planning, early warning systems, and the establishment of cyclone shelters helped to save about 100,000 lives.
Nevertheless, the physical devastation left in the storm's wake was stunning: Sidr damaged or destroyed 1.4 million homes, hurt more than two million acres of crops, and wiped out more than four million trees. What all of that means is that people have nowhere to live, many of them have lost their means for making a living, and food reserves have been wiped out.
While aid groups like Oxfam are responding with programs to provide clean water and sanitation to prevent the spread of waterborne disease and to supplement food in the months ahead, there is a great deal more that can be done to help people stay safe—and recover quickly—from storms like these.
Khan points to the need for more research on how to build low-cost but cyclone-tolerant housing in coastal areas. And then work needs to be done on developing programs with commercial banks to finance the construction of those homes. Additionally, aid groups need to help communities explore alternative ways for people to earn their livings, so that storms like Sidr don't wipe out all their options.
For these disaster risk reduction programs to be successful, added Khan, they need to be based at the community level—where local people will know best what the particular dangers are and what steps are needed to grapple with them. But there is an international component to this too: Donors need to support the preparedness work that local governments and aid groups are undertaking. It's a smart investment. Typically, each dollar spent on reducing a community's risk to disaster is worth about $8 in emergency relief.
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We were there, together with Angel Chavez, one of Oxfam America’s humanitarian officers, to gather stories about Oxfam’s work with alpaca herders. They had suffered serious losses in 2004 when a severe winter storm killed many of the wooly creatures that are the backbone of the local economy. So vital are these camel cousins to the well-being of the families scattered across the mountains that many of the shelters they have built for the animals are superior to their own mud-brick and stone homes.
The income from alpaca wool—softer than cashmere when it’s cleaned, spun, and woven—feeds and clothes families, buys them medicine, and helps cover the occasional extraordinary expense. Without the few hundred dollars herders earn each year from the sale of the wool, life in these barren, thin-aired mountains would not be possible for them. And for many, it’s the only life they have ever known, helping to account for Peru’s position as the world’s top producer—by far—of alpaca wool.
About 80 percent of the wool now on the market comes from this South American country; Bolivia produces another 15 percent; and the rest comes from a smattering of countries including Australia, Switzerland, and England. So you would think, given Peru’s dominance in the industry, that the work of these Caylloma herders would guarantee their families a measure of security. Not so.
There, at nearly 16,000 feet above sea level, nothing is certain: The cold kills, and changing weather patterns are robbing the region of the rain it needs for mountain pastures to grow. Life is hard, and people are very poor.
Oxfam’s work with Proyección has been to help Caylloma herders find ways to buffer themselves against future disasters by improving pastureland; planting barley to serve as an emergency reserve for their animals; and developing an early alert system, including the installation of a simple radio network—all at an altitude that has scared off just about every other aid group.
“Nobody has worked at this height,” said Rivera. “No one wants to come up here. Only us.”
There’s a reason: To reach Caylloma’s remote communities requires a degree of energy that would exhaust a lesser field coordinator and his team. But for Rivera, that challenge—and the need that is so evident among the families of this rugged terrain—is the inspiration that repeatedly draws him up the steep slopes to Chinosiri, Jachaña, and a handful of other hamlets.
From Arequipa, a city in southern Peru where Proyección has its offices, the drive in a pair of heavy-duty pickup trucks to the town of Caylloma took us about seven hours through rain, hail, and snow on a rutted mountain road—and that was just the first half of the journey. Following a night’s rest, we left at 6 a.m. for the three-hour climb to Chinosiri, the belly of our truck scraping the ruts as we inched around hairpin turns and splashed through streams carving gullies in the dirt track.
The snow was falling in fat, wet flakes, blanketing the mountains in white, when Rivera, in the truck ahead, pulled over and jumped out, signaling that this—of all high and remote spots—was just the place for a group picture.
“Beautiful!” he said, surveying the vast emptiness around us: no trees, no bushes, no dwellings—only mountains and more mountains with sharp rocks underfoot.
It wasn’t until I scrambled up the slippery bank to where Rivera and Chavez were already standing in the snow that I realized just how hard the work in Caylloma could be: Without the sea-level amounts of oxygen I was used to, a few quick steps at 15,748 feet high left me breathless and exhausted. Puffing hard, I slipped back down the embankment and into the truck, grateful to be sitting once again, and marveling at the stamina of my colleagues. Could I do this, like them, on a regular basis? Could anybody?
Rivera had already answered that question: No.
The air at the end of this Andean summer was cold and damp, and all of us in the pair of trucks were bundled in just about every stitch of clothing we had brought. I had on two shirts, a sweater, a fleece vest, a fleece jacket, a down vest, a windbreaker, thick wool socks, and a wool cap—just enough to keep the chill at bay.
So I was surprised to see, beyond the steamed windows of the warm truck, two boys hiking hard and fast through the mud on a slope of pasture: They had only sandals on their feet—no shoes, no socks to keep the cold away. They’re boys, I thought, and that’s what boys do: tough things.
But as we bounced along, there were others—men, women, children—all wearing sandals in the frigid air. And as the clouds swept across the sky, occasionally unleashing a shower of cold rain, some of the mountain dwellers hardly seemed to notice, and simply wrapped themselves tight in their woolen blankets and ponchos.
Jose Gonzalez Condo, who has lived all of his 39 years in the tiny community of Chinosiri, explained that he and his fellow villagers are used to the mountain weather and its variable conditions. Chinosiri is home, he said, and he likes it.
But as weather patterns have begun to change—the rains are coming late, which in turn delays the growth of pasture grasses and threatens the health of herds—raising alpacas at this altitude has become increasingly difficult, said Gonzalez. And in the recent past, there was no way to get the word out about challenging weather conditions—be they drought or cold waves—unless someone made the 30-mile trek down to Caylloma to ask for help. The only way to get there is on foot, and the walk takes a day.
Chinosiri’s new two-way radio, installed by Proyección in February, has connected this remotest of villages to the outside world. And with that connection has come the sliver of hope that a way of life for the 70 families there—and for more than 3,400 rural residents scattered across the Caylloma district—is now more secure.
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