A new insurance program for poor livestock farmers in northern Kenya has made its first pay out to some 650 herders in the vast Marsabit District.
The settlement went to farmers who lost up to a one third of their animals.
The insurance project known as ?Index Based Livestock Insurance? or IBLI, was developed in partnership by the Nairobi based International Livestock Research Institute, ILRA, and other international organizations.
It is funded by USAID, the European Union, the British government, World Bank and other financial and insurance groups.
One of the agricultural experts working on the project is Professor Michael R. Carter, director of Basis Research Program for the Department of Agriculture and Resource Economics at the University of California in Davis.
He says they will know in the next couple of months if the pastoralists are putting their trust in the program.
?The program in northern Kenya is an example of what?s called an index insurance in which you have an index which is very easy to verify,? he said.
?The index itself is designed to be a very good predictor though an imperfect predictor, of the losses that people have experienced,.?.
Carter said payouts are triggered by satellite images that literally pick up reflected light from the ground.
?That can be turned into a very good indicator of plant growth on the ground beneath the satellite. We then did a lot of statistical analysis to relate to that predictor of plant growth to actual levels of livestock mortality in the region,? he explained.
The index itself is expressed as a predicted livestock mortality number.
Carter explained, ?In the case that has just taken place in the different regions in northern Kenya where this insurance contract is offered, predicted livestock mortality rates were roughly between 25-35%.?
He said this means a typical farmer in the region was losing between one quarter to thirty-five percent of their livestock from insufficient water and forage over the last few months.
Teams of researchers are in the field surveying and studying results of the first pay out to see how farmers are using the insurance money.
Carter said the study will be a long term project to see if livestock insurance actually improves people?s lives.