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Drought Index-Insurance Pilot for Groundnut Farmers - Senegal

At the request of the Ministry of Finance of Senegal, a feasibility study was completed in 2009 to assess the potential of index insurance. This study recommended the development of weather-based index insurance for commercial farmers, and suggested a pilot for groundnut farmers in two departments – Nioro and Kaffrine. As a follow-up to these recommendations, CNAAS requested in 2011 financial and technical assistance from the World Bank in order to pilot-test index insurance for groundnut farmers. The objective of the pilot was
1) to test the operational and technical procedures of the weather index based crop insurance program with a potential for scaling up and
2) to educate farmers, intermediaries, the regulator, and members of the Government’s Ministries.
Project type:

Drought Index-Insurance pilot for groundnut farmers

Country context:

Weather variability is a key limiting constraint to investments and modernization of agriculture in Senegal as drought-prone Sahel is characterized by irregular rainfall and relatively poor soils. Created in 2008 as a public-private partnership, the National Agricultural Insurance Company of Senegal (CNAAS) is in charge of underwriting crop and livestock insurance.

Key achievements:
The pilot project has achieved the following: 
  • Weather infrastructure (automatic and manual weather stations) was set-up and weather data was collected by the meteorological agency (ANACIM) and analyzed by research institutions (CIRAD/ISRA).
  • A weather index insurance product was designed to protect groundnut farmers against drought in collaboration with farmers’ association (ASPRODEB) and Swiss Re. 
  • The policy dialogue with the Government led to its commitment to provide a 50% premium subsidy to policy holders for selected crops and livestock, including the ones under the GIIF pilot.
Additionally, The GIIF team has participated in many activities via various dialogue channels such as:
  • The “Climate Change Strategic Discussions” held in Dakar in November 2015 
  • The Risk Transfer Working Group (RTWG) held in July to discuss its objectives, and topics to address such as geographical coordination, access to data, distribution, reinsurance, etc. 
  • The Weather Risk Management Facility (WRMF) that organized a workshop on remote sensing and its application for index insurance.

 

The next phase step of the pilot is to put in place steps for CNAAS to take the lead in the project implementation process by designing index products and training coops and MFIs. To date, the project has insured close to 10,000 farmers in Senegal.

 

Key stakeholders:

Minister of Finance, Minister of Agriculture, PlaNet Guarantee, CIRAD, ISRA, ANACIM, ASPRODEB, Insurance Regulation Agency (DNA), Swiss Re

Contacts:

Fatou Assah
Program Coordinator
World Bank group
Tel: + 228 92 37 8662
Fassah@worldbank.org