Reducing climate risks - AFC assists Malagasy to insure themselves against income losses

Madagascar is one of the countries in Africa most severely affected by climate change and has one of the highest poverty rates in the world. Over 1.6 million people are facing food insecurity, as estimated by the United Nations. Climate risk insurance can help the Malagasy to protect themselves from climate induced income losses.

Since 2017, GIZ has been implementing the programme “Adaptation of Agricultural Value Chains to Climate Change (PrAda)” in Madagascar. The overall programme objective is to increase the productivity of the participating actors in the agricultural value chains particularly affected by climate change.

GIZ is implementing measures in three components:

1. The actors in the value chains obtain improved access to agro-meteorological and agricultural extension services. This enables production to be adapted to climate change;
2. The structural frameworks of the value chains, such as the organization and cooperation of actors, are improved. Access to equipment is facilitated, and the production techniques are adapted; and
3. Climate risk insurance schemes are introduced. This means that value chain actors can insure themselves against income losses due to climate and weather-related events.

Since July 2018, and for a duration of overall 49 months, AFC Agriculture & Finance Consultants GmbH is implementing the third component and work towards supporting actors along the value chains having access to insurance products in order to strengthen their resilience to deal with the effects of climate change on their agricultural production amongst others.

Since the very beginning, all three components were linked to each other and the success of the program depended on the coordination between all the stakeholders. The PrAda program and our team are intervening on all levels, e.g. on the level of the state actors (macro), insurance companies, umbrella organizations and other aggregators bringing together private sector players (meso) and finally individual producers (micro).

Our technical team, consisting of local long-term experts supported by very experienced international and national short-term consultants have always been working hard and successfully towards achieving the project goals. The situation has been very challenging over the last two years of the pandemic. Madagascar was closed for external visits until the end of 2021 and struggling with the effects of the health crisis. Meanwhile, all activities were on-going, thanks to the strong local team.

In January 2022, an AFC mission to Antananarivo took place, and a team of international experts was able to work with the local team in our AFC office – a wonderful and refreshing moment for all participants! During the mission, we were focusing on activities in the capital only, taking into consideration that after two years, it was the right moment to catch up with many of the projects’ stakeholders. Always taking care of the Covid-related safety measures, the following events took place, amongst many others:

• We meet and discussed with the government counterparts to exchange on the challenges of the beneficiaries and discuss the way forward of the project;
• A high ranking round table workshop with our partner, the local insurance company ARO was conducted;
• Lead by international experts, we organized a three-day training on insurance (e.g. index insurance, climate risk insurance) for related participants of the Ministry of Agriculture and Livestock.

Also, it was agreed that a mission to the southern part of the country – to meet the projects final beneficiaries, the farmers and insurance up takers – is likely to happen after the harvest.

For further information, please contact: Jakob.lutz [at] afci.de