New insurance protects DRC farmers against climate risk
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New insurance protects DRC farmers against climate risk
Farmers in the Democratic Republic of Congo (DRC) are facing climate challenges.
The first climate insurance product designed to protect farmers in the Democratic Republic of Congo (DRC) was launched recently.
This initiative is part of the National Agricultural Development Program (PNDA), implemented by the DRC’s Ministry of Agriculture and supported by the World Bank and the Global Shield Financing Facility, which aims to modernise agriculture and improve farmers’ living conditions in three pilot provinces: Kasaï, Kasaï-Central and Kwilu.
According to the PNDA the average national rainfall in the DRC has steadily decreased since 1951 and the country faces food insecurity due to droughts and other natural disasters.
Protection for farmers
Against this backdrop, the PNDA has introduced a climate insurance product that will protect more than 300,000 farmers in the three pilot provinces from drought (early and mid-season) and excessive rainfall (late season).
In the event of a severe climatic shock, the climate insurance will protect farmers benefiting from the NADP through direct and rapid payments, with amounts that could, in the most extreme situations, reach up to $100 of coverage per farm annually, representing around 15% to 20% of a farmer’s average annual income.
This compensation will enable farmers to purchase seeds and resume farming activities for the following season or year. Compensation will be paid directly to farmers without intermediaries or commissions.
An innovation based on satellite data
This solution was developed in collaboration with experts from the DRC Ministry of Agriculture, the Autorité de Régulation et de Contrôle des Assurances (ARCA), the World Bank, AXA Climate, the World Food Programme and national insurance companies. During a series of working sessions, stakeholders jointly designed the main technical and operational parameters of the insurance product.
This parametric insurance product relies on indices derived from satellite rainfall data (TAMSAT and ERA5). When satellite data indicates that pre-defined rainfall thresholds have been exceeded, the compensation process is automatically triggered within hours.
The product will be distributed by Mayfair Insurance Congo SA, the leading member of a national consortium comprising other insurers operating in the DRC (ACTIVA, RAWSUR, GPA, Société Financière d’Assurance, SONAS, and SUNU). Reinsurance will be provided by ZEP-Re.
Building a resilient agricultural sector
Jean de Dieu Mbey Bosimi, national coordinator of the PNDA within the Ministry of Agriculture, hopes that this insurance will reinforce the modernisation of agriculture in the DRC.
“This insurance will offer Congolese farmers essential protection against climate risks, encouraging them to invest in ways that improve both their productivity and income.”
According to Cristina Stefan, Project Manager at the World Bank the initiative could pave the way for the introduction of agricultural micro-insurance in the DRC.
New insurance protects DRC farmers against climate risk
