The Index-Based Livestock Insurance (IBLI) project in Ethiopia, with support from the Feed the Future Innovation Lab for Assets and Market Access, has already made groundbreaking contributions to strengthening resilience and economic viability of pastoralists in East Africa. This project explored index insurance contracts in which payments are based on an easily observable index that is correlated with, but not identical to individual loss.
The Borana plateau in southern Ethiopia is a vast arid and semi-arid pastoralist territory. Livestock in this area comprise the majority of household’s non-human capital and are responsible for more than two-thirds of their average income.
Pastoralist households in the arid and semi-arid areas of northern Kenya are especially vulnerable to the risk posed by climate change. This risk-reduction strategy has the effect of keeping households poorer than they need to be.