Weather index insurance enhances the resilience of Zambian farmers

The most vulnerable are the 1.5 million smallholder farming households who are predominately dependent on rain-fed agriculture.

Mr Borniface Haweza, a smallholder farmer from Pemba District in Southern Province, is one of the many smallholder farmers that suffered a total loss of crops due to climate shocks. ‘’In the 2018/19 farming season, we had very little rain. I planted my crops in December, but there was no rain until the end of January. Every day, I would go to my field to weed with the hope that it would rain. Unfortunately, it didn’t,’’ said Mr Haweza.

‘’It was painful to see our little maize crops dry up in front of our eyes. I had invested over ZMW 8,000 worth of inputs, only to recover ZMW 200,’’ explained Mr Haweza.

To protect farmers like Mr Haweza from crop losses due to extreme weather events, WFP is helping farmers access weather index insurance.

Weather index insurance is an innovative approach to managing climate related risks using a pre-defined index, such as rainfall, to determine pay-outs. The financial pay-outs, provided by Mayfair Insurance, help smallholder farmers to recover their investment losses resulting from weather related events.

To date, WFP has supported over 7,800 smallholder farmers from Southern Province to take up weather index insurance, by contributing 75 percent of the premium. Following the drought in the 2018/19 agricultural season, each eligible smallholder farmer received an average pay-out of ZMW 620, facilitated digitally through MTN mobile money wallets. In total, ZMW 5,489,567 was distributed.

‘’Weather index insurance helps stabilize smallholder farmers income – allowing them to continue farming regardless of disaster and weather uncertainties. As producers of 80 percent of the domestic supply of food in Zambia, this is crucial to ensuring food security in the country,’’ said Mr Derrick Ndimbwa, Climate Risk Management Officer.

Like many other farmers affected by the drought in the 2018/19 season, Mr Haweza used his pay-out productively, buying fertilizer, livestock feed and seeds to ensure he had access to the inputs needed to continue his livelihood activities.

To increase uptake of weather index insurance in Zambia, WFP is providing technical assistance to the Government to improve the design and management of the insurance provided under the Farmers Input Support Programme (FISP). WFP is working with the Government to ensure that the insurance offered takes into consideration smallholder farmers’ needs. Furthermore, WFP is working with Smart Zambia Institute to see how the digital payment platform for facilitating insurance pay-outs can be enhanced for the FISP programme. With this initiative, WFP hopes to see weather index insurance services extended to the one million smallholder farmers on FISP across the country.

Additionally, WFP is working with private agricultural companies (Pula Advisors, ZEP-RE, MTN and Mayfair Insurance) to improve the design and management of private insurance schemes, including the development of a phone app to allow farmers to voluntarily pay their insurance premiums and receive pay-outs. WFP has also developed training manuals and radio messages on weather index insurance in seven local languages to sensitize and encourage farmers to insure against climate risks.

Recognising that farmers may also suffer from livestock losses during shocks, WFP collaborated with the Ministry of Fisheries and Livestock and IFAD to launch livestock index insurance, expected to reach an estimated 600,000 livestock farmers across the country.