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Insurance, carbon capture and markets may support pastoralists

Iain Wright

Iain Wright of ILRI suggests that livestock insurance may hold one key to moving pastoral families towards resilience

Three options exist to move pastoralists from vulnerable to resilient lifestyles. They are commercialization of livestock systems, payment for ecosystem services and social and financial safety nets including insurance.  This was said by Iain Wright, head of the Ethiopian office of the International Livestock Research Institute (ILRI).  He was addressing about 70 delegates from around the world who are working on pastoral systems in America, Africa, Asia and Europe attending a symposium ‘Unsettled futures for subsistence pastoralism:  Adapting livestock systems in the face of climate change and land use’, part of the Society of Range Management Conference in Orlando, Florida, February 8-13, 2014.

In the closing keynote address entitled Pastoralism: From vulnerability to resilience, Wright who also heads ILRI’s research program Animal Science for Sustainable Productivity (ASSP), noted that preliminary results from a flagship project of ILRI on Index Based Livestock Insurance (IBLI), indicates that since the pilot began in northern Kenya, and during drought there was a 50% drop in distress sales of livestock assets, a further 33% drop in households employing hunger strategies and yet another 33% drop in food aid reliance by pastoralists who had taken out insurance. This suggests that if employed at wider scales, insurance may hold one key to moving pastoral families towards resilience.  The paper is co-authored with Polly Ericksen, Andrew Mude and Klaus Butterbach-Bahl, all of ILRI.

Using Kenya’s pastoral losses as an example, Wright observed that the country experienced four consecutive years of drought between 2008 -2011. The result was US$ 12.1 billion lost where agriculture accounted for US$ 1.51 billion (12.5%), livestock US$ 8.74 billion (72.2%) worth of losses and 9% national livestock herd – mostly cattle, died. The country experienced food insecurity due to drought, affecting 3.8 million people in 2009, 3.75 million people in 2011 nationally. In marginal crop areas, 1.8 million were affected, while in marginal pastoral areas, 1.9 million people were affected.

‘This magnitude of drought damage and losses to agriculture and livestock cannot be financed out of Government of Kenya’s budget and by the donor community only’ said Wright. This is where index based livestock insurance, perhaps based on a public-private partnership arrangement can be effective.

Wright also suggested that for payment for environmental services such as carbon storage (sequestration) by rangelands or wildlife services could supplement pastoralists’ income.  There were several successful schemes in Kenya where pastoral communities were receiving income from wildlife. Payment for carbon storage could promote grassland rehabilitation by controlling land degradation and preserving the water cycle and biodiversity.  But there are many barriers to developing effective carbon financing measure in rangelands including monitoring validation, and payment methods.  There are, however a number of ongoing studies, including in China exploring the feasibility of such schemes.

‘This (huge) magnitude of drought damage and losses to agriculture and livestock cannot be financed out of Government of Kenya’s budget and by the donor community only’ – Wright

With a growing demand for livestock products the commercialization of pastoralism is a viable option in many areas.  The booming export of animals from some countries in the Horn of Africa to the Gulf states as well as growing domestic demand shows the potential.  The success of this commercialization will require maintaining mobility through livestock corridors, building infrastructure such as roads, markets, quarantine stations, market services and linking pastoralists to fattening enterprises.  It will also require the development of identification and traceability systems, improvement of animal health care and veterinary services and provision of legal entitlements to land and other resources.

In extreme cases however, where access to markets is poor and the environment is very harsh neither commercialization not diversification may work, it may be necessary for people to exit traditional pastoralism and seek alternative lifestyles.

Grazing land covers 32M km2 which is a quarter of the land surface and supports over 64M poor people, of whom 30M are in sub-Saharan Africa. They have to contend with challenges such as aridity, high temperatures and low soil fertility, sharp differences in the seasons – ranging from floods to droughts, climate change, animal disease and lack of access to markets and conflict /political disturbance.

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