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Farm Radio Weekly is a news and information service for rural radio broadcasters in sub-Saharan Africa. It is published by Farm Radio International.

Farm Radio Weekly

Notes to broadcasters on livestock insurance payouts

Farm Radio Weekly first reported on this insurance scheme when it was in the early stages of development (see http://weekly.farmradio.org/2009/11/23/kenya-livestock-insurance-will-protect-livelihoods-from-drought-and-floods-associated-press-business-daily-ilri/). This week’s story states that the International Livestock Research Institute (ILRI) has made the first payouts. Earlier this month, herders received payments from the first ever index-based livestock insurance scheme in Africa (other forms of livestock insurance schemes have been tested previously in Africa). ILRI told Farm Radio Weekly that, “While it is estimated that about one-third of the cattle in this region died due to the drought, herders who took out insurance for, say, 10 of their cattle, have been paid for all 10 animals whether or not those animals died or survived the drought.”

Sake Halakhe is a herder who was present at the meeting where the first payouts were made. On video, she told her story: ” My children came to me and told me about insurance and an insurance agent came here to tell us about it and that’s how I insured 10 cattle. The reason I started to insure my animals was because my children advised me to. The people of ILRI also came and advised me of the benefits of joining. I joined the second phase because I loved the idea of a better tomorrow. The first time I paid 4000 Kenya shillings, but today I got 16,000 shillings. With this money, I am going to buy some goat and cattle. I will advise the other women to join because its important.”

According to ILRI, if cattle are valued at 15,000 Kenyan shillings (Ksh) per head (about US$150), an insurance policy that covered 10 animals (about 150,000 Kenyan shillings or USD 1500) would pay out about Ksh 27,000 (US$270). Referring to farmers who have lost up to a third of their herds, Isaac Magina from UAP Insurance says, “When you look at a 33% loss, that is a significant portion of the asset base of any business and it would be difficult to survive without insurance.”

You can also watch these short videos on YouTube which show herders’ reactions: http://www.youtube.com/watch?v=kQs-us86D6M

http://www.youtube.com/watch?v=5nnxIUWnt0w&feature=related

For further comments from Jimmy Smith, ILRI’s director general, and photos of the community meeting he attended, visit:  http://www.ilri.org/ilrinews/index.php/archives/7348

Visit the Index-Based Livestock Insurance project’s website: http://livestockinsurance.wordpress.com/

Here are some previous Farm Radio International scripts on the subject of pastoralism:
Camels provide farmers in drylands with milk and income (Package 76, Script 4, October 2005) http://www.farmradio.org/english/radio-scripts/76-6script_en.asp
The role of native breeds in maintaining livestock health: Story ideas for the radio (Package 63, Script 3, April 2002) http://www.farmradio.org/english/radio-scripts/63-3script_en.asp
Livestock management practices to cope with climate change (Package 84, Script 7, August 2008) http://www.farmradio.org/english/radio-scripts/84-7script_en.asp

Compare this week’s story to this previous Farm Radio Weekly story on crop insurance payouts:

-Kenya: Mixed reactions as farmers receive crop insurance payouts (FRW 130, October 2010)

http://weekly.farmradio.org/2010/10/04/kenya-mixed-reactions-as-farmers-receive-crop-insurance-payouts-allafrica/

You might like to produce a program looking at the potential advantages and disadvantages of crop or livestock insurance for farmers. These types of insurance are relatively new and may generate interesting discussions. You could ask an insurance expert to comment, and ask farmers or agricultural experts in your region what they think of insurance. Here are some questions to inspire you:

-Why do farmers think insurance is a good idea in their circumstances? Or a bad idea?

-What reasons would an insurance representative give to farmers to encourage them to sign up?

-How much of a necessity are these types of insurance in your broadcast region? For example, are rainfall patterns stable?

-How much would farmers be willing to pay for insurance?

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