Weather Index Insurance: A Powerful Tool Against Hunger

The CGIAR Research Program on Climate Change, Agriculture and Food Security (CCAFS) has released a study demonstrating that weather-based index insurance can help the rural poor on a large scale to become more food secure. The report features WFP and Oxfam America’s R4 Rural Resilience Initiative (R4) as one of the five most significant efforts to expand insurance coverage to people who need it the most.

CCAFS brings together the world's best researchers in agricultural, climate, environmental and social sciences to identify and address the most important interactions, synergies and trade-offs between climate change and agriculture. 

R4: Protecting Livelihoods And Building Resilience 

R4 was launched by WFP and Oxfam America in 2011, with support from Swiss Re, building on the ground-breaking work of Oxfam and partners, including the Relief Society of Tigray and Columbia University’s International Research Institute for Climate and Society.  

R4 helps vulnerable rural households to increase their food security through community risk reduction, microinsurance, livelihoods diversification, credit and savings. The most innovative aspect of R4 is the ability of poor famers to pay for their insurance with their labor on activities that reduce the impact of drought and floods, and increase their productivity.   

With the protection of insurance, when a drought hits, farmers receive automatic insurance pay-outs. This prevents them from selling off productive assets like livestock to survive or taking their children out of school.  In 2012, more than 12,000 drought-affected households received an insurance pay-out of over US$ 320,000. This is the first time that a weather index insurance programme in Ethiopia has directly delivered pay-outs at such a large scale to small farmers. 

WFP And Weather Insurance

Weather insurance is a powerful tool to help people to better manage climate risk.  

Since 2006, WFP has worked with its partners to test and scale up innovative ways of providing insurance protection to help people become more resilient and food secure.  R4 is one of the most successful initiatives emerging from this work.  

Exceptional Scale-Up

In Ethiopia R4 expanded from 200 farmers in one pilot village in 2009 to more than 25,000 across 89 villages in 2014. In 2012, R4 expanded to Senegal and implementation started this year in Malawi and Zambia.

The Evidence Shows It’s Working

The first assessment of R4 in Ethiopia shows insured farmers save 123% more than the uninsured, buy 25% more oxen and invest in seeds, fertilizer and productive assets. In one cluster, farmers increased their reserves of grain over 250% more than uninsured farmers.

Women, like Binta and Zemada, often heading the poorest households, are the ones achieving the largest gains in productivity, through investments in labor and improved planting materials.

What’s Next?

Given the results and the growing evidence WFP and its partners are working to scale up R4. By 2017, we hope to have reached 100,000 farmers with insurance and other risk management tools.