Pastoralists enter safety zone with insurance cover

Failure to put in place mechanisms for compensating pastoralists in case of livstock losses is partly to blame for North Eastern province's high poverty index. Photo/FILE
Failure to put in place mechanisms for compensating pastoralists in case of livstock losses is partly to blame for North Eastern province's high poverty index. Photo/FILE 

Pastoralists will be compensated for loss of their animals from January after a livestock insurance product is launched in Kenya.

They will be required to pay about Sh3,800 every year to cover at least six heard of cattle.

The premium will increase as the number of livestock to be covered increases.

However, details of the exact amount of premium to be paid will depend on the insurance company that have agreed to partner with the International Livestock Research Institute (ILRI), the institution that developed the product.

The compensation will ensure that pastoralists do not suffer losses as it happens today when their livestock die from drought, disease or flooding, fuelling a cycle of poverty and insecurity.

The product has been released by ILRI under its weather-index livestock insurance pilot project.

Two companies, UAP and Equity bank’s insurance brokerage division, are in discussion with ILRI on how the project will be rolled out.

Mr Andrew Mude, an economist based at ILRI, confirmed that discussions were underway to find an international re-insurer of the product.

The premiums could go up to Sh7,700 for households with more than eight cattle, noted ILRI.

On average, a healthy beef cattle goes for Sh25,000.

“We have found that interest from households (in Marsabit where studies have been going on) was quite significant,” said Mr Mude.

The Kenya Livestock Marketing Council said the initiative was a positive development in a region where most people depend on livestock.

“This is a very good plan because livestock is the basic commodity in Northern Kenya,” said council official Qalicha Wario.

ILRI will study satellite images on weather changes in North Eastern Province.

In cases of severe drought or flooding that results in death livestock, farmers will be compensated.

The satellite surveillance will help the insurers bypasses the need for veterinary officer to go on the ground and certify that animals have died before payments are made.

Failure to have an official mechanism for compensating pastoralists in case of livestock losses is partly to blame for the province’s high poverty index.

Studies show that more than three million pastoralist households are regularly hit by severe drought. ILRI data shows that in the past 100 years, northern Kenya recorded 28 major droughts, four of which occurred in the last ten years.

Further data from the research body shows that milk provides 44 per cent of the livelihood, followed by food at 15 per cent, salary and wages at 14 per cent and livestock sale at 10 per cent.

“For livelihoods that rely solely or partly on livestock, the resulting high livestock mortality rate has devastating effects, rendering these pastoralists among the most vulnerable populations in Kenya,” said ILRI in the report.

The insurance scheme has also been suggested as one of the solutions to cattle rustling, which is rampant in northern Kenya.

Usually, rustling happens when some clans want to replenish livestock they lost during a calamity.

Last year, the Institute of Security Studies (ISS), a pan-African think-tank, suggested that livestock insurance should be incorporated in the small arms protocol that has been established by the eastern Africa states. “Livestock insurance will serve as an important tool towards addressing cattle rustling, which in some cases occur in an attempt to replenish stock after a long spell of drought,” said ISS.

Implicit insurance

The think-tank says that instead of using formal institutions like credit and insurance systems, pastoral households could pursue implicit insurance arrangements from extended families, clans, ethnic groups and neighbourhoods, with a view to coping in times of crisis.

But in most cases, traditional forms of insurance have not been viable due to the extensive nature of the calamities.

The scheme is also a mitigating factor against climate change, which has made regions like northern Kenya to have more severe droughts followed by heavy rains and flooding.

Pastoralists covered by the insurance scheme will have a means of reducing their climate-related livelihood vulnerability.