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Andrew Mude

Andrew Mude, right, at a ceremony for the Norman Borlaug Award.

Sophia Mbugua

Q&A: Livestock insurance helps African herders survive droughts

NAIROBI—A Kenyan economist has won the 2016 Norman Borlaug Award from the World Food Prize for an innovative program that provides pastoralists with livestock insurance.

Andrew Mude, a senior economist at the International Livestock Research Institute (ILRI) here, created a program that protects pastoralists against losses from drought, an increasing scourge for nomadic communities in northern Kenya and southern Ethiopia. The index-based insurance uses satellite imagery revealing how much foliage has been lost to calculate the projected impact on the herds. It eliminates the need for an actual census of dead animals. More than 3 million pastoralist households in northern Kenya depend on goats, cows, sheep, and camels, and the high rate of livestock losses during droughts is a major cause of childhood malnutrition. With their households constantly on the move, the payments give families enough money to survive economic downturns without having to sell off their herds. Foreign aid programs from several nations help subsidize the cost of the insurance.

Mude, 39, says his interest in finding new tools for economic development comes from his parents, who were the first boy and girl from the Marsabit district of northern Kenya to attend high school and who later helped other villagers acquire an education.

The Norman Borlaug Award for Field Research and Application, announced on 30 August, honors a young scientist who exemplifies Borlaug’s commitment to applying basic research to help herders around the world. Mude earned his Ph.D. at Cornell University before returning to Africa and joining ILRI in 2006. Mude spoke with ScienceInsider shortly after the news was announced. This interview has been edited for brevity and clarity.

Q: Why do herders need livestock insurance?

A: While conducting research on the region’s vulnerability to climate change, we discovered that 75% of these communities depended on livestock for their livelihood. The biggest challenge these communities face is drought-related mortality. The poorest and most vulnerable communities are hardest hit by regular droughts because they depend on livestock for milk, meat, and money. We wanted to provide an instrument that reduces the likelihood of livestock mortalities and reduces poverty.

Q: How does it work?

A: It’s a plan designed to protect headers against prolonged foliage scarcity. We are insuring an average experience in a given area related to an underlying risk, hence the index-based insurance. In this case the risk is drought-related mortality, and the index is the predicted livestock mortality. The health of the livestock depends on the quality of the foliage available to the animals. We are using satellite readings called the Normalized Differen[ce] Vegetation Index to calculate the level of greenness and how much foliage is available in an area. Once the foliage disappears, we get an index. We use this data to predict the number of livestock that will be affected, which triggers a payment to the herders.

Q: What about the financial aspects?

A: Insurances are purchased annually before the onset of the rainy season. Herders are paid regardless of whether they lose animals or not, giving them an incentive to help manage their livestock in the best way possible. The payouts depend on the degree of drought and range from 5% to 100% of the total insured value.

Q: What has been the impact so far?

A: We have been tracking 925 households in Marsabit County since 2009. In those cases, 36% of insured households are less likely to sell their livestock in distress [than their peers without insurance] and 25% are less likely to reduce food intakes for children. Over 11,500 households have already bought insurance. The Kenyan government has already provided 5000 free contracts to herders in Wajir and Turkana counties and hopes to add about 9000 households by October.

Q: What’s next?

A: We are working closely with the government and partners with the goal of rolling back subsidies for sustainability. We also hope to expand the program and have identified communities in Somalia, Mali, and Senegal. We are looking into bundling insurance with market prices and disease surveillance, those not well-developed markets that deliver livestock imports, feeds, and veterinary medicines. We are also looking into marshaling locals to collect and send verifiable data, such as the incidence of livestock diseases, through smartphones. 

Sophie Mbugua is a freelance writer based in Nairobi.