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Global Parametrics, the parametric and index-based disaster risk transfer company, has partnered with One Acre Fund to provide smallholder farmers in Zambia and Malawi with financial protection against the adverse impacts of drought on their crops.
One Acre Fund is a social enterprise that currently supports around 5 million farmers across nine countries in Sub-Saharan Africa, providing agricultural services including inputs, extension, training, and insurance.
In partnership with Global Parametrics, a CelsiusPro Group company, a new water-balance index has been developed to calculate payouts, supported by data collected and verified by One Acre Fund from individual farmers in the regions.
The pair explain that the index, which leverages weather data from independent third parties, “measures the balance between rainfall and evapotranspiration over a specific period, yielding a measure of availability of water for crops.”
Payouts for droughts caused by the El Niño phenomenon have already been issued this season, benefiting roughly 77,600 smallholder farmers in Zambia and Malawi with payments of approximately US $812,600.
“Putting farmers first is embedded in everything we do at One Acre Fund. With El Niño looming, we worked to find ways to cushion farmers from the devastating effects of drought on their crops, which is their main source of livelihood,” said Luke Viljoen, One Acre Fund Zambia’s Country Director.
The risk capacity within One Acre Fund’s smallholder loan portfolio is provided by the Natural Disaster Fund, a public-private partnership funded by UK and German governmental entities and is managed by Global Parametrics. The Natural Disaster Fund shares risks with global reinsurer Hannover Re and is mandated to provide risk capacity for parametric solutions that enhance climate and natural catastrophe resilience for poor and vulnerable communities around the world.
Mark Rueegg, CEO of CelsiusPro Group, said, “Thanks to the index-based solution, farmers do not need to present proof of loss or undergo lengthy damage assessments. If the water balance index falls below a specified threshold, payouts are triggered.”
Viljoen added, “Smallholders manage the majority of Zambia’s arable land, so supporting them and building their resilience is paramount. With our growing base of farmers, more can access innovative solutions that protect them from drought and floods. Providing them with much-needed financial relief will help accelerate sustainable agriculture transformation and improve agricultural resilience for the nation.”
Global Parametrics, One Acre Fund develop parametric solution for smallholder farmers in Zambia & Malawi was published by: www.Artemis.bm
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