Ethiopian Farmers Receive Crop Insurance Compensation for the First Time

Addis Ababa April 26/2024 (ENA)  Smallholder farmers in two woredas of Ethiopia have etched their names in history by becoming the first recipients of crop insurance compensation. 

In response to the pressing need for climate risk solutions in Ethiopia's agricultural sector, the crop insurance was initiated by the Agricultural Transformation Institute (ATI), the World Food Programme (WFP), and Pula Advisors.

This trailblazing program, which aims to shield farmers from the formidable climate risks that pose significant threats to agricultural productivity is funded by the Government of Germany, it was learned.

In this pay out for the season, a total of 51,132 farmers will be compensated for the losses as a result of various perils. 

According to Pula Advisors Country Manager Dagmawi Haileyesus, the initiative has ushered in substantial benefits for small-holder farmers across Ethiopia.

Notably, the beneficiaries are youth and women underscoring that the program's commitment to inclusivity and empowering marginalized groups within the agricultural sector, he said.

Pests and diseases have emerged as the leading culprits of crop loss with farmers in the Jama and Were Illu woredas bearing the brunt of substantial damage to their crops due to the onslaught of Yellow rust, the country director said, adding that the yields in these areas plummeted below the trigger threshold, prompting the activation of the insurance payouts.

Dagmawi acknowledged the challenges faced by Ethiopian farmers due to unpredictable weather patterns and emphasized that "the compensation will aid farmers in regaining financial stability."

He further underscored the effectiveness of the robust public-private partnership in bolstering the resilience of small-holder farmers.

Agricultural Transformation Institute (ATI) CEO Mandefro Nigussie emphasized the significance of the crop insurance program and its impact on Ethiopian farmers. 

He said that seventy-one percent of adults rely on agriculture as a source of income and  over sixty percent of farmers are engaged in agriculture.

With increasing climate change and pest-related risks, agricultural development and production are of paramount importance, the CEO noted, adding that Ethiopian farmers need improved access to inputs and credit.

"They, along with governments, require access to formalized transfer mechanisms when agricultural production suffers due to unemployment," he stressed.

According to Mandefro, the implementation of the crop insurance program marks a watershed moment in supporting Ethiopian farmers and fostering resilience in the face of climate risks.