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, known as a dry region and severely affected by climate change. This agricultural insurance aims to protect smallholder farmers from the effects of drought and insect pests. It is innovative because it ensures the value of inputs purchased and invested, against a low return.
On June 17, 2021, the symbolic ceremony for the first payout took place in Amboasary Atsimo, the capital of Amboasary district. WFP purchased this agricultural insurance for 3,500 farmers. They will now receive compensation for losses incurred during the long-rain maize crop. The Village Saving and Loans Association “Mandresy” network contracted the insurance on behalf of all its members participating in the programme in the localities of Sampona, Ifotaka, Behara, Berano, Tanandava, Maroalomainty, Maroalopoty, Ambovombe and Amboasary.
Solosoa Mikaky, one of the members impacted by ARON'NY FAMBOLENA VOATSE said that, “this is the first time that smallholder farmers like me and my community will receive compensation following crops affected by drought. Even if the harvest has not reached the expected levels, our sweat, our efforts, our investments in seeds, in 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."
Index-based insurance provides farmers with the opportunity to access financial services and protect their livelihoods in the event of crop damage. The compensation received will allow them to reinvest and continue their activity by generating an income and helping to keep the quality and level of their consumption. This type of insurance is part of a system that involves the government and the private sector, local insurance companies and international reinsurers, financial institutions and the agricultural sector. Thanks to a partnership with insurance company ARO and the microfinance institution OTIVTANA/SMMEC, WFP has been able to set up this kind of insurance in Madagascar. The objective over the long-term is to popularize index-based insurance to farmers throughout the region, and Madagascar. The partnership has also mobilised implementing partners such as the IFAD-funded DEFIS programme and the NGO CTAS.
"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.
WFP was the first UN agency to develop a micro insurance 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 an approximation of losses. For example, the index uses crop yields, rainfall, temperature, or vegetation, rather than actual losses. Prompt compensation is distributed to farmers if the index exceeds a predetermined threshold.
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.
The ceremony held in Amboasary Atsimo was assisted by 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.
Valérie Rasoahaingo, Communications consultant, UN Joint SDG Fund programme FAGNAVOTSE, valerie.rasoahaingo [at] wfp.org, +231322362151
Frederica Andriamanantena, Climate and Insurance officer, frederica.andriamanantena [at] wfp.org