ARON’NY FAMBOLENA VOATSE, an insurance programme for farmers
In November 2020, the World Food Programme (WFP) in Madagascar launched ARON’NY FAMBOLENA VOATSE, an area-yield index insurance programme for farmers in nine pilot localities in the districts of Amboasary and Ambovombe in the South of Madagascar, a region severely affected by the impacts of climate variability and change and known for its dry conditions. The agricultural insurance scheme aims to protect smallholder farmers from the effects of drought and insect pests that negatively affect farmers’ yields, building farmers’ capacity to cope with and recover from shocks.
During the 2020/21 agricultural season, WFP has purchased agricultural insurance policies for 3,500 farmers, covering both the rainy (November to April) and the dry (May to October) seasons. Following severe drought conditions that have negatively affected Southern Madagascar, the index triggered US$350,000 in insurance payouts for all the insured farmers, with households now receiving compensation for crop losses incurred during the long-rain season.
Insurance payouts ceremony
On June 17, 2021, the symbolic ceremony for the first insurance payout took place in Amboasary Atsimo, the capital of Amboasary district. The ceremony saw the participation of the General-Secretary of the Anosy Region, the Mayor of Amboasary Atsimo, the Executive Secretary of the Emergency Prevention and Management Unit (CPGU), the Head of Branch of the National Office of Risk and Disaster Management (BNGRC), the Regional representation of participating ministries as well as representatives of the United Nations agencies that implement the FAGNAVOTSE programme.
Solosoa Mikaky, one of the members benefiting from the insurance programme ARON’NY FAMBOLENA VOATSE commented, "This is the first time that smallholder farmers like myself and my community will receive compensation for crops losses due to drought. Even if the harvest has not reached the expected levels, our sweat, our efforts, our investments in seeds, fertilizers and everything else will not be lost because we will be compensated. We hope that this type of insurance will continue to exist for our children and all generations after them."
WFP’s Climate Risk Insurance Work
WFP has been the first UN agency to develop a microinsurance programme as part of a broader climate risk management strategy. Since 2006, WFP has been working with its partners to test and develop innovative insurance protection methods to help people become more resilient and ensure their food security. So far, WFP has focused on an innovative type of insurance, called index-based insurance, which is based on a proxy for losses that compensates farmers based on changes in a pre-determined index. For example, the index uses crop yields, rainfall, temperature, or vegetation, rather than actual losses. Prompt compensation is distributed to farmers if the index falls beyond a predetermined threshold.
Index-based insurance allows farmers to better manage climate-related shocks, protecting their livelihoods and investments in the event of a failed agricultural season and stimulating faster recovery. The compensation received prevents farmers from adopting negative coping strategies, ensuring access to basic needs and services, and allowing them to reinvest and continue with their productive activity.
This type of insurance solution involves the collaboration between the government and the private sector, local insurance companies and international reinsurers, financial institutions and the agricultural sector. Thanks to a partnership with the insurance company ARO and the microfinance institution OTIVTANA/SMMEC, WFP has been able to set up the insurance scheme in Madagascar. The Village Saving and Loans Association (VSLA) „Mandresy“ network acted as the policyholder on behalf of all its members participating in the programme and distributed the insurance policies in the localities of Sampona, Ifotaka, Behara, Berano, Tanandava, Maroalomainty, Maroalopoty, Ambovombe and Amboasary. The initiative also brought together partners under the IFAD-funded DEFIS programme who supported building the capacity of the VSLAs as savings and credit associations and as social groups, and the NGO CTAS, which supported training, monitoring and evaluation activities.
The initiative’s objective over the long term is to increase awareness and provision of index-based insurance services among farmers throughout the region, and in Madagascar, and to support the development of sustainable and scalable insurance solutions, while building the capacity of local stakeholders to take over insurance processes.
"Madagascar is mainly made of farmers, but few or none take out insurance…the index-based insurance that we have set up with WFP shows that insurance is a useful and accessible product in the agricultural segment…a first time in Madagascar“ – Lantonirina Andrianary, the Director General of ARO.
Théodore Mbainaissem, Head of WFP’s Ambovombe field office said, "Farmers continue to be covered by this insurance for the next season, and we continue to encourage farmers to subscribe to this ARON’NY FAMBOLENA VOATSE insurance for the next campaign that will start in November 2021". He also recalled that „this insurance programme is part of the FAGNAVOTSE programme“, the UN Joint SDG Fund programme to support an integrated and inclusive social protection system, aligned with the National Social Protection Strategy, implemented under the leadership of the Ministry of Population, Social Protection and the Promotion of Gender Equality (MPPSPF), under the coordination of the Office of the United Nations Resident Coordinator in Madagascar. Funded by the United Nations Joint Fund for the Sustainable Development Goals, the FAGNAVOTSE programme is under the technical and financial support of four United Nations agencies: UNICEF, UNFPA, ILO and WFP.
Published at https://www.preventionweb.net/news/wfp-madagascar-support-integrated-and-inclusive-social-protection-system