Nyala and Africa Insurance Share Companies paid close to 300,000 birr to farmers in Tigray Regional State last Saturday November 12 in a ceremony held at Axum Hotel, Mekelle. The two insurance companies sold insurance policies for farmers in the region to cover crop loss due to shortage of rain.

Nyala insurance has been in the business of providing insurance service for crop failure in the regional state since 2009. Africa Insurance began just this year. The former paid Birr 48,538for its coverage in the third year of its operation in the region and Africa paid Birr 247,124 in its first year of operation. A total of seven villages received a payout, two from Nyala Insurance and five from Africa Insurance.

Though the idea of weather index insurance seems new to Ethiopia, it has been done around the globe for a long time. Area yield index insurance has been tried in a subsidized manner in Canada, India, Sweden and the United States since the mid 1980s. It is an insurance scheme that is linked with weather indexes such as rainfall rather than a possible consequence of weather such as crop failure.

The ongoing pilot projects of Horn of Africa Risk Transfer for Adaptation (HARITA), which is a joint project of Relief Society of Tigray (REST), Oxfam America, Dedebit Credit and Saving Institution (DECSI) , Mekelle University, Ethiopian National Metrological Agency (ENMA), Nyala Insurance S.C and Africa Insurance S.C, Tigray Regional Food Security Coordination Office, Tigray Cooperative Promotion Office, Institute for Sustainable Development (ISD), International Research Institute for Climate and Society (IRI), are exploring the various options in which insurance could be used as a tool for index insurance including disaster relief and development help. Such a scheme can provide room for a wider strategy to help farmer’s escape poverty.

HARITA’s allied partners cooperated in designing an affordable drought weather index for insurance packages including Teff, Wheat, sorghum, barley and Maize. When it began in May 2009, only 200 households in Tigray Regional State joined the project.

This is the very first attempt in the region and it is hoped that the model can effectively reach the very poor farmers who were previously viewed as uninsurable. Currently, more than 13 thousand households are enrolled in the program across 43 villages in seven Woredas of the regional state.

CapitalEthiopia