Lifting the burden of drought from Ethiopian farmers
When the rains don’t come and the harvests fail, families in Ethiopia go hungry. However, the world's first humanitarian insurance policy, an initiative spearheaded by WFP, the World Bank and the Ethiopian Government, offers a glimmer of hope to poor families in the country.
With East Africa in the grip of a drought crisis, Ethiopia has been chosen to benefit from the world's first humanitarian insurance policy. WFP spokesperson Paulette Jones tells us how farmers such as Hamu Woticha, who have lost everything in past droughts, may benefit in the future.
When the rains don’t come and the harvests fail, families in Ethiopia go hungry.
As the food runs out and the water dries up, they sell off their cattle at rock-bottom prices in a desperate bid to escape the jaws of poverty. Often, they lose everything.
However, a new initiative spearheaded by WFP, the World Bank and the government of Ethiopia, offers a glimmer of hope to poor families in the country.
A lucky man?
By the standards of many rural farmers in Ethiopia, Hamu Woticha seems to be a lucky man.
Hamu’s wife, Tigist, is also in good health and sells soap, biscuits, matches, tea, razor blades and kerosene to her neighbours from a corrugated iron shelter near her home.
Tigist may earn no more than fifty US cents a day, but this is more than most of her neighbours would earn.
Hunger looms large
Hamu also owns a goat, two oxen, a donkey and six sheep. He often sub-lets his oxen to other farmers in his village, in exchange for food or money.
But despite his relative good fortune, Hamu is not unlike so many other rural farmers in Ethiopia in that he treads a precarious line between survival and destitution.
Twenty years after famine killed an estimated one million people, hunger still looms large in Ethiopia.
There have been five major droughts, causing untold deaths, suffering and hardship.
No time to recover
Many families never have time to recover from one calamity before another befalls them, wiping out crops, animals and what few assets they may have managed to scrape together.
My family was attacked by hunger, the land produced nothing. I even had to sell my plough. We had nothingIn 2002, when the last drought ravaged Worja Woshigula village in Oromiya region, in south-central Ethiopia, Hamu lost his entire herd of cattle.Hamu Woticha on the effects of drought
Many of his cows, sheep and goats, were so emaciated and weak that they died before reaching the nearest market, leaving their fly-infested carcasses strewn across the bleached white landscape.
Those few animals which survived the long trek were sold to the first bidder at rock-bottom prices, and for considerably less than Hamu had originally paid for them.
Attacked by hunger
“That was a terrible year of drought for us,” says Hamu.
“I’d worked years and years to find enough money to pay 1,500 birr (US$150) to buy each of my oxen, then in 2002, I sold my herd for 500 birr.
"My family was attacked by hunger, the land produced nothing. I even had to sell my plough. We had nothing,” he says.
“There was nothing at all that I could do. I begged the Lord to save us and prayed for good luck. Then food aid came from the World Food Programme and we survived.”
Rapid reversals of fortune
In Ethiopia, rural farmers’ fortunes can rapidly turn sour through bad weather, natural disasters or ill health. Farmers try to fend off disasters by selling their few assets for cash or food.
But getting those assets back can take many, many years. Research has shown that it takes on average, ten years for a family to recover once they have lost everything but in many cases, assets are never recovered.
However, Hamu’s quiet determination has meant that he has been able to get back on his feet in near record time.
But in reality, Hamu is still considerably poorer today than he was in 2002.
Then he owned a herd of oxen, more valuable and prized than the handful of sheep and goats, and the donkey which he calls his own today.
In the face of such poverty and vulnerability, WFP, with the World Bank and the Ethiopian government, has launched a pilot project to see if an insurance policy could help prevent rural Ethiopians from losing all of their assets and falling into destitution.
In March 2006, French firm AXA-Re was awarded the world’s first insurance contract for humanitarian emergencies to limit the losses for some 17 million rural Ethiopian farmers in the case of extreme drought.
The policy kicks in if rainfall levels drop significantly below historic averages – to a level which would lead to widespread crop failure.
Farmers will receive up to a total of US$7 million within weeks to counter the early effects of drought and to help them avoid selling off valuable assets.
Shifting the burden
The payout will be either in the form of food aid, social support or even cash relief to farmers in pre-selected districts of the country where loss of agricultural crops would affect huge swathes of the population.
The Ethiopia Drought Insurance initiative is intended to shift the burden of massive drought and losses off the shoulders of poor farmers in Ethiopia and onto those of an insurance company.
“This insurance scheme is a good idea,” says Hamu. “If I’m promised 900 birr (100 dollars) before the real drought begins, this will help. I might not have to sell my animals and I can buy some food to feed my family.
"I may even buy haricot beans and maize seeds to renew my stocks and keep them for sowing until the rains come.”
Reliant on agriculture
Approximately eighty percent of the Ethiopian population is engaged in some form of agriculture or cultivation.
But for many people, growing food in rural areas is always difficult and they need food aid in the hardest months.
In a country prone to drought, farmers rely on rain-fed agriculture. Most farms are not irrigated and oxen pulling heavy ploughs still dominate the landscape.
When the harvest is good, Hamu can reap up to 7 quintals (700 kgs) of food, but admits that this is not sufficient to feed his family all year round.
Hamu says he and his family desperately need alternative ways to generate a living besides agriculture and working on the land.
“If I had some capital, I’d invest it in buying and selling different goods, I’d become a tradesman, an entrepreneur. Salesmen are very clever people and the life is lucrative and good,” he says.
But although he dreams of bigger and better things, at the moment what Hamu really needs is the peace of mind that when the next drought hits, which is more probable than not, he will not have to part with the family’s much prized, and hard won, goat, oxen sheep and donkey.
Hamu and his family are officially categorised as chronically food insecure, and as such receive food distributions from the World Food Programme in exchange for work they undertake community-based projects like land reclamation, soil conservation and water harvesting schemes. But he is not perceived to be among the poorest of the poor.
Productive Safety Net Programme
Hamu is among the seven million people suffering from chronic hunger who require food and cash assistance through the Productive Safety Net Programme (PSNP).
Launched in January 2005, the PSNP is a relief to development strategy supported by the government, donors, UN agencies, NGO’s and the international community.
With agricultural development as the basis of the initiative, the PSNP is aimed at combatting the long-term need for emergency food distributions in Ethiopia.
The chronically food insecure like Hamu, are people who have lost the capacity to produce or to buy enough to meet their annual food needs even under normal weather and market conditions.
The population affected by transitory food insecurity is vulnerable.
Under any emergency circumstances, the likelihood of these people falling back into food insecurity, and falling through the Safety Net, is high.
With the new World Food Programme drought insurance initiative humanitarian assistance would arrive up to 4 months earlier than is traditional.
Earlier payment will enable farmers to plant alternate crops or avoid having to sell their assets to survive.
Hopefully it will prevent poor farmers from heading towards destitution.
Uninsured loss of income and assets caused by natural disasters in developing countries is a major threat to the lives and livelihoods of vulnerable populations.
Insurance is a critical requirement for development as uninsured losses lock entire populations in vicious cycles of deepening destitution.
The Ethiopian Drought Insurance initiative could be one solution to help address the perennial challenge of poverty and destitution in the country.
Poverty does not have to eat away at an individuals’ dignity. Hamu Woticha, like many others in Ethiopia, wants to be self-sufficient.
He wants to be able to provide for himself and his family.
“I tell you, the scheme you talk about could be the deliverance we have been waiting for,” says Hamu.