IFAD and WFP have been working together on weather index-based insurance (WII) since 2008. This upcoming technical guide translates the findings and experience to date into practical decision-making steps for IFAD and WFP country programme management staff and other donors interested in promoting this risk mitigation tool.
It looks at each phase of the process:
1. Assessing whether WII is the right method of intervention and is feasible
2. Developing a pilot
3. Possible future areas that IFAD, WFP and other donors can support through scaling up.
The guide includes background information, explanations and resource recommendations to help inform decision-making.
Rural poor people in developing countries are vulnerable to a range of risks and constraints that impede their socio-economic development. Weather risk, in particular, is pervasive in agriculture. This technical guide discusses WII, a class of insurance products that can allow weather-related risk to be insured in developing countries where traditional agricultural insurance may not always be feasible.
The guide shows how insurance operates best where it forms part of an integrated approach to risk management, where constraints such as lack of access to finance, improved seed, inputs and markets can be addressed. As such, it is important to understand that WII does not have universal application. Its applicability needs to be considered in context, through case-by-case evaluation.