Smallholder Crop Insurance in East Africa: A New Way Forward

Smallholder farmers in East Africa are increasingly vulnerable to risks associated with changing weather patterns. Climate insecurity puts their livelihoods in jeopardy and discourages investment in new technologies. As recent studies have explored, viable business models for crop insurance have the game-changing potential to reduce risks for the 2 billion people that depend on smalholder farms for income and subsistence.

Despite the promise, attempts at developing crop insurance have been rife with complications. Pilot programs have failed to scale for a number of reasons, including: insufficient climate data, low uptake due to lack of affordability as well as poor product design, unfavorable policy environments, high operational costs, and lack of scientific research to determine risk. The few that show scalability, such as the R4 Rural Resilience Initiative in Ethiopia (R4) and ACRE in East Africa, have done so by building inclusive participatory processes with strong institutional partners and by integrating insurance into other risk reduction offerings, but they continue to face a number of challenges, especially with regards to data availability, high operati
onal costs for installing and maintaining independent weather stations, and independent risk assessment.

As an implementing partner with Tetra Tech ARD for USAID/Kenya and East Africa’s PREPARED Project, SSG has developed a comprehensive public-private partnership between Jubilee InsuranceEast Africa, Kenya Meteorological Department (KMD), Rabobank, UNFAO and others to design and launch an Index-Based Weather Insurance product referred to as “Kinga Kilimo” (“Protect Farming” in Kiswahili). The product is designed to provide ICT based Agro-weather advisory to farmers via SMS prior to climatic events to provide forecasts for land preparation, timing for planting, crop variety and cultivars, crop management (fertilizer, pesticide application, cultivation, water supplementing), postharvest management, and soil conservation. It also offers parametric Weather Based Index Insurance for risk management of crop production losses associated with extreme weather events.

Both the partnership and the product are intended to address the challenges and to incorporate lessons learned from the previous attempts at crop insurance. As such, PREPARED has designed the partnership around several critical innovations to maximize success in designing a crop insurance product:

Incorporate Weather Data: To overcome the limiting factors of data quality, the partnership provided capacity building to the Kenya Metrological Department (KMD) in order to produce a blended weather dataset that incorporates over 35 years of data. This dataset uses Potential Evapotranspiration (PET) and GeoCLIM – a geospatial climate data-management and analysis software tool that integrates observed station data with satellite-derived estimates – so as to address both ex-ante and ex-post risk faced by the farmer at farm level.

Few, if any, crop insurance schemes have had such a comprehensive investment in improving data collection. Mr. Francis Ngari, the Micro-Insurance Manager at Jubilee Insurance, explains the value-added from this approach, noting, “We see this shared value approach to partnership as a big breakthrough in designing crop insurance. Previously we have had challenges accessing climate data and engaging with the Kenya Meteorological Department in designing crop insurance products, however, this partnership has made this possible. Getting credible and more robust blended data from KMD has made our premiums lower and improved the credibility of our products.”

Improve the Service Provision of Government Partners:  Guided by SSG Partnership Specialist Polycarp Ngoje, the  PREPARED project has helped transform the culture of the Kenya Meteorological Department through PREPARED’s Quality Service Improvement Program (QSIP) to be service-oriented and to focus more on potential collaboration and partnership to enhance usage of weather data.

Peter Ambenje, Director of KMD, reflects on the importance of this shift in orientation, stating that “The innovative approach to the partnership design of the Weather Index Insurance Kinga Kilimo product has opened our eyes on how we can engage with the private sector and generate products that add value as opposed to just sharing climate data. The Quality Service Improvement Program (QSIP) has changed the approach and mindset of our staff as far as service delivery is concerned. We look forward to adopting this model in engaging with other partners moving forward.”

Mr. Ngari attests that this partnership is “a breakthrough in agriculture insurance.” The United Nations Food and Agricultural Organization (UNFAO), which has contract farming for legumes and pulses in Eastern Kenya, has also found this partnership approach useful to them for downscaled weather forecast and climatological zoning based on historical data and water requirement satisfaction indexing for various crops. According to Philip Mwangi in the program office in Machaon County, “the partnership has been the missing puzzle [piece] in the contract farming. The scientific tools and downscaled agro weather advisory tool is a great avenue to disseminate crop management information to the farmers from land preparation to post harvest management.”

The new product is being test-marketed in several counties in Kenya this fall with the goal of rolling it out across much of the country for the spring growing season. It is expected to reach over 15,000 smallholder farmers in these pilots alone. Perhaps more importantly, though, the lessons learned from this partnership – including the need to bring the right partners together, the importance of using proper climate data as a base, and the need for government agencies to understand shared value and service provision – could transform crop insurance across all of Africa.

Can Better Data Enhance the Climate Resilience of Small Holder Farmers?

WILD-photoFarming is – at the best of times – a risky undertaking.  For smallholder farmers in developing countries, such as Kenya, this is not the best of times. A report by Environment for Development finds that severe droughts in Kenya have interrupted rainfall partners with serious consequences such as harvest failure, deteriorating pastures, and livestock losses. [1] These losses have implications for agricultural incomes as well as local food security. It is therefore essential that smallholder farmers have access to risk management tools, such as climate data or weather insurance.

For years, insurance companies and donor organizations have been trying to develop weather-indexed insurance for smallholder farmers with limited success.  A key challenge in many countries has been the lack of accurate climate data – both current and historical.  Weather insurance requires accurate historical and current climate data so that insurance companies can develop models that allow them assess risk and set premiums.  Without accurate data, insurance premiums end up being very high – often beyond the means of a farmer to pay.  These high premiums have hindered the uptake of weather insurance products by smallholder farmers.

A new tool may help address this challenge by providing highly accurate historical and current climate data that can help lower weather insurance premiums significantly.  As a key outcome of the USAID/Kenya and East Africa PREPARED project, the GeoCLIM tool allows for much more accurate climate data by synching up inputs from both ground weather stations and satellites.  GeoCLIM was originally developed by PREPARED partners and stakeholders (including Tetra Tech, FEWS NET, USAID, ICPAC, UCSB and USGS) for use by policymakers across East Africa to address climate change and famine early warning. SSG Advisors and PREPARED partners also envisioned its significant potential for the insurance industry – providing much-needed data required to better forecast risks and, therefore, set premiums.

Under the auspices of PREPARED, SSG Advisors brought together national meteorological and hydrological organizations, climate scientists, technology firms, insurance companies and farmers groups to explore how GeoCLIM might underpin the development and scaling of weather-indexed insurance products targeted at smallholder farmers in Kenya and, eventually, across East Africa.  At a two-day workshop, participants used Osterwalder’s  Business Model Canvas to develop and clarify what a weather-index insurance business model might look like.[2]  Partners mapped out product offerings, channels, value proposition, relationships etc. – all the essential elements of how a weather-indexed insurance product can be offered and scaled for smallholder farmers.

With business models developed, the partners are now working to formalize a partnership that will result in the launch of a new weather-index insurance product for smallholder farmers by late 2016.  By harnessing the power of climate data, insurance companies, governments, donors and scientists are giving small holder farmers the tools they need to adapt to a rapidly changing climate.

[1] Kabubo-Mariara, Jane and Kabara, Millicent. (20145). Climate Change and Food Security in Kenya. Environment for Development Discussion Paper Series. 15-05.

[2] Osterwalder, A., Pigneur, Y., & Clark, T. (2010). Business model generation: A handbook for visionaries, game changers, and challengers. Hoboken. NJ: Wiley. Sahlman, WA (1997). How to Write a Great Business Plan. Harvard Business Review75(4), 96-108.

Wastewater Solutions: Partnerships for Sustainability in the Mara-Serengeti

Mara Partnership

The Mara Serengeti Hoteliers and the partners after Signing the Resource Efficiency Partnership

On September 15th, the Vice President of the United Republic of Tanzania, Dr. Mohamed Gharib Bilal, and other government officials gathered alongside members from a number of industries on the edge of the Mara River as part of the Mara Day celebration – an annual event shared between Kenya and Tanzania devoted to protecting the natural beauty and resources of the Mara River region.

This year’s Mara Day marked an exciting milestone. For the first time, Kenya and Tanzania signed an agreement ensuring that both countries will sustainably co-manage the Mara ecosystem. This inter-governmental commitment demonstrates a prominent level of engagement for sustainability efforts in the area. Meanwhile, members of a new public-private partnership signed and agreed to address some of the difficulties associated with water pollution in the Mara-Serengeti region. The partners included the Mara-Serengeti Hoteliers Forum (MSHF), the multi-national chemicals manufacturing company BASF, the Lake Victoria Basin Commission (LVBC), the Kenya National Environmental Management Authority (NEMA), and the Water Resource Management Authority (WRMA) of the Lake Victoria Region.

The partnership declared at Mara Day is a result of  SSG Advisors’ private sector mapping work, carried out as part of the USAID Kenya and East Africa Planning for Resilience in East Africa through Policy, Adaption, Research and Economic Development (PREPARED) project, with the continued efforts of Polycarp Ngoje, PREPARED’s Partnership Specialist. In describing the level of effort and cultivation needed to get partners on board, SSG’s Director Thomas Buck noted, “This partnership has been over a year in the making, and has really started to take shape in the past 4-5 months.”

Through intense collaboration and the utilization of a diverse multi-sectoral set of skills and assets, the partnership will be instrumental in addressing and improving resource efficiency challenges and practices throughout the Mara-Serengeti region. By providing technical assistance through assessments and management guidance to hospitality operations in the area, the impact of BASF’s involvement will be two-fold: lowering operating costs and establishing sustainable wastewater practices. The result will be a cleaner and healthier ecosystem, sustaining the natural beauty of the region.

The partnership has already set goals for the first year. During the upcoming months, the partners plan to establish a measurable breakdown of how to achieve the reduced effects of wastewater in the Mara. In addition to forming a quantitative, results-driven analysis, the partnership also aims to facilitate a noticeable increase in the use of green technology and innovation practices. Lastly, within a year from now, the group intends to identify and institutionalize a set of actionable wastewater practices – management models and technological innovations – intended to become the industry standard in the area.

Using Participatory Methods to Facilitate Multi-Stakeholder Partnerships

At the recent “Collaboration Post-2015 Forum: Where can Partnerships Take Development?” practitioners from government, civil society and the private sector all acknowledged how complicated it can be to negotiate and then successfully implement multi-stakeholder public-private partnerships (PPPs). Many participants saw this complexity as a key barrier to successful collaboration.

We see the challenges of effective cross-sectoral collaboration every day. Indeed, in our experience the complexity of a partnership goes up exponentially in proportion to the number of partners.   A simple two-partner PPP can be challenging enough, but a large multi-stakeholder partnership can be especially trying to negotiate and manage.

Partnership stakeholders brainstorm goals for reducing water loss in Jinja, Uganda

Using participatory methods in PPPs can help diverse stakeholders reach a consensus on complex issues.

To help address this complexity, SSG is incorporating participatory methods (PM) as a key tool for forging consensus within large, multi-stakeholder partnerships.     Participatory methods themselves are not new. First pioneered in the 1970s, PM includes a range of activities with a common thread, enabling stakeholders to play an active and influential part in decisions, which affect their lives.  Although PM has been used primarily for organizational capacity building and democratic local governance, SSG sees value that PM can provide in forging consensus among diverse stakeholders in complex PPPs.

In East Africa, SSG’s Polycarp Ngoje is pioneering the use of PM under the USAID PREPARED project for a series of complex partnerships that are not only cross-sectoral but cross-boundary in nature. For example, the PREPARED project is facilitating an anti-poaching partnership (APP) that brings together government wildlife services in Kenya and Tanzania, conservation NGOs, universities, technology companies and USAID together to strengthen coordination of anti-poaching efforts in the Mara landscape.   The issue of poaching is a hot topic that never lacks controversy, so traditional approaches to collaboration would likely be ineffective.

Using PM, Polycarp and the PREPARED team are facilitating visioning and action planning sessions that are enabling discrete groups of organizations and institutions to move from a shared sense of purpose to common action.  Partners have developed action plans that focus on a series of ‘sub-partnerships’ to pilot approaches and technologies with the goal of scaling up successful pilots starting in late 2015.

Design Thinking for Partnerships (D4P): Can Design Thinking Create Shared Value in Partnerships?

When most people hear the term ‘design thinking,’ images of slick consumer products such as iPads come to mind. The success of companies such as Apple and IDEO has made design thinking one of the trendiest topics in business, but what is it? Design thinking is defined as combining empathy, creativity in the generation of insights and solutions, and rationality in analyzing and fitting various solutions to the problem context. While the approach has proven successful in consumer electronics and web design, design thinking has struggled to find broader practical application in either business or government. In development, groups such as Acumen use design thinking primarily as a tool for development problems in the physical world, such as latrines and cook stoves. However, many development problems are more institutional, organizational or process-related in nature.

PREPARED D4GRecently, business schools and companies have begun adapting design thinking to better address business and process challenges in order to foster innovation. Dr. Jeanne Liedtka, at UVA’s Darden School, has created Design Thinking for Growth (D4G) with the goal of making design thinking tools and methods accessible to managers and professionals. According to Liedtka, “Design thinking is an approach to solving business problems, especially suited to conditions of high uncertainty.”

Design thinking helps address this uncertainty by offering a framework through which businesses can innovate absent the hard data that drives most business strategy. Design thinking creates pathways for solving what Liedtka calls, ‘wicked problems,’ where there is a high degree of complexity and only limited data to inform decisions. It encourages creativity, but grounds that creativity in context.

At SSG Advisors, we’ve learned that most partnerships start with high degrees of uncertainty and complexity! Lacking hard data that collaboration will be successful, business, government and civil society partners often start with a hunch that through collaboration they can create shared value, but they are often uncertain of how and why this is the case.  For example, in East Africa, we are facilitating an anti-poaching partnership by bringing together a diverse range of multinational and local companies as well NGOs and governments. While all the partners agree on the goal and the desire to work together, figuring out exactly what the partners will do together proved challenging.   Moving partners from vague notions of ‘we should we work together’ to an actual partnership that is achieving real results requires a high level of creativity grounded in a keen understanding of operational and organizational realities.   Facing these challenges, we began asking ourselves: could the tools of D4G be applied to partnerships in a way that enhances the shared value proposition of collaboration?


Design Thinking



To answer that question, we are incorporating elements of design thinking into our STEP (Sustainable Transparent Effective Partnerships) methodology as a way to empower partners to explore and define more innovative ways to work together. We are adapting D4G tools including Journey Mapping, 360 Empathy, Mind Maps, Combinatorial Play and Rapid Prototyping to enable partners to define their shared value proposition more quickly. In the East Africa case, we adapted a proven facilitation technique, Advanced Participatory Methods, to enable partners to co-create a plan for a regional partnership that will empower communities to combat poaching in the Mara Basin. We are also experimenting with new tools, such as the Partnership Model Canvas, which allow partners to identify shared value creation opportunities in a dynamic and graphic manner. The goal is to empower partners to develop innovative partnerships that deliver results. We call the new approach Design Thinking for Partnerships (D4P) and we are excited to be piloting D4P around the world this fall. We look forward to sharing our results and learning with our readers as they emerge.





Innovative Water Partnership Enhances Climate Resiliency of Communities in East Africa

Photo Courtesy of the World Bank

Photo Courtesy of the World Bank

Every day, roughly 45 million m3 of water goes missing from global water systems. This is enough to serve nearly 200 million people. These losses cost water utilities approximately USD $14 billion each year, equal to a quarter of the total yearly investment in potable water infrastructure for the entire developing world. Water systems in Africa are particularly hampered by this problem. On average, more than 35% of the water supplied in East Africa is lost in this way. As climate change advances, these losses represent not only a significant financial burden, they place communities at risk of water shortages.

Relatively low-cost interventions to reduce water system loss can deliver impressive results in reducing costs and expanding access to existing water supplies. Using SSG’s STEP partnership methodology, the USAID/East Africa PREPARED project identified opportunities to create shared value through an innovative water loss partnership in Uganda with Itron, a major international water technology company, the Uganda National Water and Sewerage Corporation (NWSC) utility, and MTN, Uganda’s leading mobile operator. The partnership is designed to improve service delivery and customer engagement while also reducing Non-Revenue Water (NRW)—that is, the water that is processed and supplied by a water utility provider, but is then lost due to leaks, theft, or metering errors. Itron will support NWCS by providing management and technical tools to help the utility access real-time information about water leaks, illegal water consumption, and metering errors; streamline its management systems; and upgrade its infrastructure. MTN, meanwhile, will support a Water Community Communication (WACOCO) platform for two-way communication between the water utility and its customers, allowing water users to share their feedback, report leaks or water theft, and register complaints on service delivery with the utility. The Mobile operator will also integrate water billing to mobile money payment, thus reduce on bill paper use on bill printing and postage. The partnership seeks to reduce NRW in Jinja by 5% by August 2015, resulting in substantial financial savings for NWSC and conserving a scarce resource.

To forge this partnership, the USAID/PREPARED project convened a major workshop in Jinja, Uganda, in late September 2014 bringing together partnership stakeholders to discuss quality service improvement goals for the partnership. The group identified 14 customer types, agreed on service improvement standards and targets, and developed employee quality service improvement questionnaires and customer feedback instruments for eliciting customer feedback on water services delivery.  As a result, the partnership will not only reduce water loss, it will improve customer service in National Water and Sewerage Corporation in Jinja and Iganga utility– a win for the utility, customers and the environment.

According to SSG’s Polycarp Ngoje, “This partnership is just the beginning. In the months ahead, we will work with the partners to take the Jinja model to other municipalities in East Africa. We will also engage banks and financial institutions as partners to develop innovative financing instruments that will allow any municipality in East Africa to tap into credit markets to finance NRW reduction thereby driving scaling and sustainability.”