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Satellite and cellphone imagery to scale climate-smart crop insurance in Kenya

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The Cultivate Africa’s Future Fund (CultiAF) is a ten-year, CA$35 million partnership (AUD$37 million) between IDRC and the Australian Centre for International Agricultural Research (ACIAR). CultiAF funds applied research aimed at improving food security, resilience, and gender equality across Eastern and Southern Africa.

Weather hazards cause significant hardship for smallholder farmers in Kenya, and climate change is expected to further exacerbate their vulnerability to extreme weather. The anticipation of possible losses discourages farmers from making productivity-enhancing investments, trapping them in low-risk yet low-return agriculture. Agricultural insurance can be a sustainable approach to unlock investments in agriculture for smallholders and improve their resilience and productivity.

The challenge

The livelihoods of millions of smallholder farmers across the developing world are under threat from extreme weather events such as droughts, floods, and heatwaves. These risks are projected to significantly increase due to climate change.

Crop insurance protects farmers against the financial risks of unpredictable weather and it has been widely advocated as a tool to help farming households escape poverty traps and invest in climate-smart high-productivity agriculture. However, there are very few successful insurance schemes targeting smallholders. The high monitoring and verification costs of traditional insurance; the low demand for index-based insurance that eliminates the need to verify losses; and the lack of complementary risk-management options (such as irrigation and drought-tolerant cultivars) are all limiting factors.

The research

Researchers will compare photo and satellite-based insurance with area and yield-based insurance to assess their effectiveness in increasing the productivity, resilience, and food security of smallholder farmers. They will use satellite and cellphone imagery to verify losses, observe management practices, and engage with farmers.

The researchers will rigorously evaluate the demand for and influence of insurance packages. They  will promote the adoption of productivity-enhancing yet resilient technologies through bundling with stress-tolerant seeds and remote advisories. Ground photos taken by farmers will help reduce monitoring costs, minimize basis risks, and create synergies with climate-smart technologies. By taking photos of insured crops, farmers will engage directly in the insurance process and improve trust and tangibility.

Expected outcomes

  • Train 45,000 farmers on the benefits of climate-smart risk management strategies, of which one-third are expected to adopt the technology;
  • Increase satellite and cellphone imagery for climate-smart crop insurance in Kenya;
  • Increase the adoption of resilience-enhancing technologies (irrigation and drought-resistant varieties);
  • Reduce crop losses due to weather risks and increase the use of climate-resilient technologies (such as irrigation), which are expected to improve food and nutrition security in the long-term;
  • Increase productivity and diversity;
  • Increase insurance coverage and reduce insurance premiums;
  • Develop trust between farmers and insurers by using photo-based insurance, which will lead to more farmers adopting insurance products.

Learn more about this project.