AFD, IFAD to Develop Agricultural Index Insurance in West Africa
4 June 2012: The Agence Française de Développement (AFD) and the International Fund for Agricultural Development (IFAD) have partnered to develop agricultural index insurance in West Africa, as a means to protect smallholder incomes, improve rural livelihoods and contribute to food security in the region.
Through the agreement, AFD is providing financing to establish a mechanism to monitor and manage weather risk by developing and testing an index-based insurance approach in the region. The project will implement adapted technical solutions that uses satellite technology to measure the impact that weather shocks on farming yields. Through developing a range of crop specific insurance products, smallholder incomes will be protected allowing these farmers to invest in their farms and thus contributing to overall food security.
It is expected that the programme will also improve access to credit by lowering default risk due to more predictable future income. The programme will be combined with support to the Planet Guarantee programme, which is co-financed by the International Finance Corporation through its Global Index Insurance Facility. The programme aims to: launch and allow for the large-scale testing of agricultural index insurance in West Africa; and assist in mitigating food price volatility. [IFAD Press Release]