Satellites to help Kenyans insure against drought

Alister Doyle, Reuters 22 Oct 09;

OSLO (Reuters) - Satellites measuring the greenness of Kenya from space are set to help insure livestock herders against droughts and mitigate the effects of climate change, experts said Friday.

"This is a new approach to tackle an old problem," Carlos Sere, director general of the International Livestock Research Institute (ILRI), said of the satellite-based insurance for cattle, goats and other animals.

"In the volatile climate change world this type of project will be more important," he said during a visit to Oslo. The Kenyan pilot scheme, due to start in early 2010, would be the first such satellite insurance for a developing nation.

Satellite images will measure the greenness of vegetation in the Marsabit area of northern Kenya. A shift to brown will trigger payouts to pastoralists because of expected livestock deaths from drought.

"Traditionally we have helped pastoralists by sending them hay if there is a drought, or treating the weakest animals with vaccines to keep off diseases," Sere said. "That's very inefficient and expensive.

"With traditional insurance you can insure your cow. But then the vet has to come and certify that it's dead. The transaction costs are huge," he said. The satellite system bypasses the need for such verification.

Andrew Mude, an ILRI expert, said talks were being held with Kenyan insurer UAP, reinsurance from Swiss Re and Kenya's Equity Bank on details.

Annual premiums were likely to be $50-100 a year for households with 6-8 cattle, the ILRI said. Aid agencies might prefer to pay premiums rather than help after a drought.

MONGOLIAN BLIZZARDS

Sere said satellite insurance hoped to avoid flaws in other "index based" insurance schemes which give payouts to all farmers if more than a certain number die in benchmark flocks.

He said that a U.N. deal to fight climate change due to be agreed in Copenhagen in December should keep the poor in mind when trying to limit greenhouse gases from agriculture.

Livestock generates 18 percent of world greenhouse gases, more than the total from transport, according to the U.N.'s Food and Agriculture Organization. Animals produce large amounts of heat-trapping methane from their digestive systems.

"Our overall pitch is: yes, the world may be producing too many animal products," Sere said.

"But in Africa and Asia you have large numbers of people producing small amounts each in intricate systems that are key to feeding billions of people," he said.

That meant that greenhouse gas curbs should focus mostly on agriculture in developed nations, he said. Cows in developing nations, for instance, produce milk, work as plow animals and are a source of other products such as meat, hides or manure.