Options for enhancing resilience in pastoral systems

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Presented by Shirley Tarawali, Andrew Mude, Jan de Leeuw, Mario Herrero, Silvia Silvestri and Susan MacMillan at the Brussels Development Briefing on New challenges and opportunities for pastoralism in ACP countries, Brussels, 22 February 2012

Transcript of Options for enhancing resilience in pastoral systems

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    Options for enhancing resilience in pastoral systems

    Shirley Tarawali, Andrew Mude, Jan de Leeuw, Mario Herrero, Silvia Silvestri, Susan MacMillan

    Brussels Policy Briefing no.26New challenges and opportunities for pastoralism in ACP countries22 February 2012

  • Key messagesRangelands constitute the largest land use system globally, and pastoral communities are the environmental stewards of much of theseThe resilience or adaptive capacity of pastoral communities, and the natural resources on which they depend can be improved by:Securing assetsProviding opportunities for diversificationIndex based livestock insurance has the potential to counteract excessive vulnerability to drought, which will mitigate ad hoc coping strategies. Some of the significant public development investment in post hazard drought responses could go towards subsidizing insurances to keep these affordable for the poor and to buttress pastoral livelihoods against the effects of drought*

  • Rangelands and pastoral communities

  • Tropical arid and semi-arid rangeland based systems population density less than 20 persons/kmlength of growing period (LGP) less than 60 days/annumno significant crop production possible

  • Largest land use system on earth

    35 million km2 24% of the total land area Support 50% of the Worlds livestock

  • 200 million people depend on rangelands for livelihoods

    Half live on less than $2/day

  • VulnerabilityClimate variabilityFuture climate changeFood insecurityConflictPoor capacity to copeUnder investmentMarket shocksDisease outbreak

  • Options to improve resilience

  • Increasing resilience (adaptive capacity)*

  • Increasing resilience*Main cause of vulnerability

  • Cause of Livestock MortalityComponent Shares of Income Drought is by far the leading cause of livestock mortality

    Disease and Predation likely to be directly related to drought Sale of livestock and livestock productions constitute 40% of household income

    External support (food and cash) make up nearly 25% of household incomeLivestock Share of Productive Assets (Median 100%, Mean 49%)Data source: Project baseline 2009 (924 Marsabit Households)

  • Mitigating animal asset loss

  • Index-Based Livestock Insurance (IBLI)An innovative insurance scheme designed to protect pastoralists against the risk of drought related livestock deathsBased on satellite data on forage availability- NDVI , this insurance pays out when forage scarcity is predicted to cause livestock deaths in an area.

    IBLI PILOT

    First launched in Northern Kenya in Jan 2010. Sold commercially by local insurance company UAP with reinsurance from Swiss ReEthiopia pilot to be launched in Aug 2012.

  • Lessons and Challenges from the Pilot

    It is feasible to design index-based livestock insurance contracts attractive to both pastoralists to individually purchase and to commercial financial institutions that must market, sell and underwrite the productsPastoralists bought the insuranceCommercial Insurance Company, Insurance Agent and Reinsurance company involvedThere appears to be considerable demand for IBLIMore than 3,000 pastoralists have purchased the IBLI contractMore than 600 of them receive indemnity payments after the drought in October 2011Extension for informed decisions: Creative education tools can help pastoralists to rapidly grasp the IBLI concept.

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  • Lessons and Challenges from the Pilot

    Cost effectiveness and density of delivery channels is critical for success and commercial viability. Successive improvements in ICT infrastructure has been used for product delivery - premium collection and indemnity payments leading to generalized market developmentPrivate-Public ProvisionChallenges in the varied incentives of private partners stressing copyright and profit and partner public institutions (such as ILRI) interested in identifying, testing and scaling innovative solutions that leverage the market to enhance livestock related-livelihoods of the poor*

  • The Case for Public Provision

    Development agencies and governments spend a lot of resources on drought response activitiesIBLI: proactive market approach to complement reactive drought expenditurecontribute to shifting the paradigm from response to development.social safety net securing the productive assets of these vulnerable populationsILRI has in place a rigorous impact assessment study on the social and economic welfare impacts of IBLI that will help the efficient targeting of public investments for livestock insurance.Most agricultural insurance programs receive subsidies:US agricultural insurance program Farmers only pay 40% of the actuarially fair premium.India, with one of the worlds largest index-insurance programs in the world provides a 50% subsidy to farmers.

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  • Key messagesRangelands constitute the largest land use system globally, and pastoral communities are the environmental stewards of much of theseThe resilience or adaptive capacity of pastoral communities, and the natural resources on which they depend can be improved by:Securing assetsProviding opportunities for diversificationIndex based livestock insurance has the potential to counteract excessive vulnerability to drought, which will mitigate ad hoc coping strategies. Some of the significant public development investment in post hazard drought responses could go towards subsidizing insurances to keep these affordable for the poor and to buttress pastoral livelihoods against the effects of drought*

  • Thank youwww.ilri.org/ibliwww.ilri.org

    *Payment for ecosystem services I would suggest to put a broader incentives-based instrument, aiming at including all market-based instruments for environmental policy (such as PES, but not only).

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