Launch of AACI’s Index Insurance Product for Cotton Farmers
On April 25, 2019, GIIF partner Atlantique Assurances Cote d’Ivoire (AACI) organized the official launch ceremony of its index insurance product – Atlantique Assur’ Coton – designed to provide insurance coverage for cotton farmers in Cote d’Ivoire. The ceremony was marked by the presence of several Government officials, including the Minister of Solidarity and Social Cohesion, Ms. Mariatou Kone (also Mayor of the town of Boundiali), the Prefect of the Bagoué Region, and the Regional Director of Agriculture. Hundreds of participants attended the event, including cotton farmers through their umbrella association representatives as well as aggregators operating in the cotton sector (ginning companies, financial institutions, etc.).
In September 2018, AACI entered into an agreement with one of the major cotton trading companies of Cote d’Ivoire – IVOIRE COTON. The agreement is expected to allow for more than 37,000 cotton farmers and members of the IVOIRE COTON network to be covered with an index-based insurance product underwritten by AACI, under the GIIF project. The pilot project will initially cover 500 villages in Northern Cote d’Ivoire and will be a first step before generalizing the distribution of the index product to other regions and other crops (e.g. maize) in the next few years.
While cotton is one of the most structured and organized agricultural value chain in Cote d’Ivoire, it is also one of the most exposed to risks, especially those stemming from climate change. The last three to four years have been disastrous for cotton farmers; the sector was severely hit by droughts that made cotton yields drop by 45% from 2015 to 2016. This translated into huge loan defaults for cotton farmers amounting to USD 20 million in the entire value chain.
With the launch of Atlantique Assur’ Coton by AACI, and the financial and technical support from GIIF, cotton farmers have an opportunity to protect their assets and investments from future losses due to rainfall volatility. Under the partnership between GIIF and AACI (Grant Agreement signed in August 2018), close to 75,000 farmers are expected to benefit from an insurance cover underwritten by Atlantique Assurances in two years.
For more information, please contact: Racine Ly, Financial Sector Specialist (rly@ifc.org)