Situation Assessment for the Introduction of Weather Indexed Insurance in oromiya Region

Client: Sanyu Consultants Inc.

Objective of the study: Insuring crops against crop failure in rain-deficient areas is a common scheme being used to help farmers survive hard times due to rain failure. The project focuses on an insurance scheme designed to introduce farmers in rain-deficient highland farm areas to insuring their crops. The general objective of this Situation Assessment is, therefore, to identify potential kebeles with types of crops to be insured by Weather Indexed Insurance


(WII), as part of a programme under a pilot project to be implemented by the Rural Resilience Enhancement Project in five woredas of the Oromia region (Arsi Negele, Adami Tulu, Bora, Boset and Ilfata) characterized by a prevalence of low rainfall. The specific objectives are:

• Identifying potential kebeles  and their characteristics,
• Identifying communities within the identified potential kebeles to further assess the situation through focus group interviews,
• Assessing the attitude of the community towards the demand for WII.


Methodology Used :The methodology, tailored to fit the stated specific objectives set in line with the main objective, has three major components: collecting data on agricultural and administrative aspects of the five woredas using a questionnaire, conducting a woreda-level situation assessment workshops to identify potential kebeles and finally conducting key informant interviews and focus group discussions in selected communities. The data collected through the three channels was compared and triangulated.


Findings : A close analysis of the survey data indicated the following findings:
-The data collected from the woreda administration and that obtained from workshops and focus group discussions and interviews indicate similarity in crops grown, pattern of production, crop calendar and seasons.

-The kebeles prioritized are truly in need of WII. The need has been felt by the communities as most of them expressed their willingness to pay for WII. The maximum amount of insurance premium farmers are willing to pay varies from crop to crop, kebele to kebele and individual individual. The expressed average premium payments could serve as a starting point for the evaluation of the adequacy to avail the insurance product.

-The crops to be insured include maize, haricot bean, teff, wheat and sorghum. The type of the most favorite crops varies from woreda to woreda. In most woredas, communities expressed that they wanted to insure multiple crops rather than a single crop.  The choice of the crops to be insured has to be kebele-specific on the basis of the peculiarities of production.

-The crop calendar and the seasons are clearly known. However, closer study of the frequency of occurrence of weather risks is required.

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