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Food and Agriculture

Insuring Cows and Goats Improves Kenyan Lives

About 4,000 pastoralists are benefiting from a livestock insurance product that covers half of northern Kenya. Credit: Miriam Gathigah/IPS

NAIROBI, Nov 6 2013 (IPS) - “That is the sound I love the most in the whole world,” Hussein Ahmed says as the bells tied to his cattle begin clinking as they return home. Ahmed, a pastoralist in Marsabit district in arid and semi-arid northern Kenya, lost all his animals in 2011 during one of the worst droughts in the region for over 60 years.

At the time, Ahmed travelled to neighbouring Ethiopia in search of water and pasture for his cattle.

“I was running away from armed cattle rustlers who came to steal animals that were spared by the drought. During the 250 km journey from Marsabit to Ethiopia I lost all my animals due to the lack of pasture and water.

“Before that [I lost my animals] to cattle rustlers trying to replace what they had lost to drought,” Ahmed tells IPS.

He returned to Marsabit one month later, dejected and empty-handed. But a clansman, who had signed up for a pilot livestock insurance product, gave Ahmed five goats and a cow and a chance to start over.

Life is different now. Ahmed has restored his herd and has security, even in the face of drought and continued cattle rustling.

A year ago he signed up for the same pilot livestock insurance product that his clansman has – the first ever cover for pastoralists in Kenya, which is being offered by NGO International Livestock Research Institute (ILRI).

“I joined in 2012, and since then I have been paid for lost livestock on two occasions, including in March this year,” Ahmed says.

The insurance is subsidised by ILRI’s partners: the United Kingdom’s Department for International Development, the European Union and the Australian Agency for International Development.

At first cover was only available in Marsabit. But in August it was implemented in the northern Kenyan counties of Isiolo and Wajir. And thanks to its success in this East African nation, it is now being piloted in Borana, an arid and semi-arid zone in southern Ethiopia.

According to ILRI, 4,000 or half of the pastoralists in northern Kenya have been covered. However, it is difficult to verify the total number of pastoralists in the region. Teresia Njeri, an environmental official in northern Kenya, tells IPS this is because “pastoralists do not stay in one place for long, they move around constantly.”

The herders play a significant role in the region. According to Kenya’s ministry of agriculture, livestock and fisheries, the estimated value of the country’s pastoral livestock sector is 800 million dollars. World Bank figures show that Kenya has a total GDP of about 37 billion dollars. And the Intergovernmental Authority on Development in Eastern Africa, a regional trading bloc, estimates that over 90 percent of the meat consumed in East Africa comes from pastoral communities.

But the life of a pastoralist has always been a difficult one. Issa Salesa, a pastoralist in Isiolo, tells IPS that they are always vulnerable. “Drought usually strikes many parts of northern Kenya from June to December and it gets worse between January and April, so basically pastoralists and their animals are at risk of starvation and violent attacks by cattle rustlers all year round,” Salesa says.

But now Ahmed and Salesa, like the thousands of other pastoralists in their districts who have signed up for the insurance, know that if their animals die in a drought, they will receive compensation for them. For Ahmed this means that his family will have food throughout the year and his children can now attend school.

Yusuf Aden, a pastoralist in Marsabit and a beneficiary of the insurance product, tells IPS that pastoralists are required to insure at least 10 of their livestock and premiums vary from animal to animal.

“For instance, for 10 goats and above you pay a premium of about 20 dollars per year. This is affordable because we only sell one goat to raise the money to insure at least 10 goats,” Aden says.

“[The insurance] aims to compensate clients in the event of a loss but unlike traditional insurance, which makes payouts based on case-by-case assessments of individual clients’ loss realisations, this livestock insurance pays policy holders based on an external indicator, such as the availability of pasture,” Andrew Mude, who is in charge of the livestock insurance project at ILRI, tells IPS.

He explains that satellite data provides estimated readings of pasture availability and there is a policy payout when pasture scarcity is predicted to cause livestock deaths in an area.

Insured herders are compensated for an above 15 percent loss of their livestock. But the benefits to their lives have been greater.

“Insured households have experienced a 33 percent drop in the likelihood of reducing their nutritional intake, a 50 percent drop in distress sales of livestock [this happens when there is drought] and 33 percent in their food aid reliance,” Mude says.

Though it is not certain that this new insurance will catch on in the rest of Kenya. Insurance broker Beatrice Wambui points out that “insuring livestock is not commercially viable.”

“Insuring against nature is a risky business, you have no control over climate … But in areas where livestock insurance is working, and if companies can find ways to be in a win-win situation with herders, this product is changing lives,” Wambui tells IPS, adding that unless insurance companies partnered with NGOs they would not be able to reach pastoralists.

She explains that while insurance companies were beginning to consider introducing a similar product, they were doing so on “a very small scale and are unwilling to advertise it.”

“Some are working with as few as 50 clients just to see how it pans out in a year,” Wambui says.

Njeri points out that while the ILRI insurance was improving livelihoods and security, it needed to reach a wider audience.

Pastoralists from the Samburu, Turkana, Pokot and Marakwet districts of northern Kenya still remain at risk of losing the source of livelihoods to cattle rustlers – the insurance is not yet available in these areas.

Moses Lentoimaga is a pastoralist from Samburu district and he lives in fear of riffle-wielding cattle rustlers. Bandits attacked his village on Oct. 18 and killed five of his neighbours and stole 1,000 cattle. He too wants the security that Ahmed and Aden have.

“Before going to our neighbours in Ethiopia, they should first come to our rescue,” Lentoimaga tells IPS.

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  • lightweaver1213

    I think this is a wonderful program. No one who lives in area where water is plentful ever stops to think what farmers or cattle ranchers would do if there was a long-term drought. For decades, various countries in Africa and elsewhere have suffered droughts that not only have ravaged their crops, but livestock has been lost, and lack of clean drinking water has brought on a number of diseases that adults and children like suffer from. I am happy when I see big corporations that supply clean water are able to help, especially in Africa. I hope this proves to be an answer to the pastoralists in Kenya.

  • Johnny McCarron

    I’m surprised that so many people don’t insure their livestock. I’m happy to see that a lot of people out in Kenya do insure, as it is very useful in the event of something happening. After all, it is your livelihood and you want to be sure that you are doing what you can to make sure your livelihood doesn’t take a hit. Do you have any advice for choosing livestock insurance?

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