PlaNet Guarantee - Burkina Faso
17,535 (end 2015)
Satellite-based weather index insurance, area yield index insurance
Cereals, cotton
Drought, decreased yield
PlaNet Guarantee provides satellite based weather index insurance and area yield index insurance products for maize and cotton farmers in Burkina Faso. MFIs and banks are the main distribution partners. PlaNet Guarantee activities in Burkina Faso started in 2010 and the first products were sold in 2011.
11%, $13 per farmer
Developing a product for cotton was important as it is a more profitable crop (average hectares cultivated are greater among cotton growers). In 2014, 7,500 Sofitex (state cotton company) contract farmers that received input loans from Ecobank through their farmer cooperatives were insured with a satellite index (maize) and area yield index (cotton). A 2011 PlaNet study found that index-based crop insurance in Burkina Faso "has a positive impact on the amount of credit given, the fertilizer purchased, the volume of production and the added value." The amount of credit insured farmers received once they had insurance was 170% more than they received without insurance.
The variety of distribution channels that support the pilot is the key to the project’s success – microfinance institutions (MFIs), banks, and NGOs. Developing a product for cotton was important as it is a more profitable crop (average hectares cultivated are greater among cotton growers). In 2014, 7,500 Sofitex (state cotton company) contract farmers that received input loans from Ecobank through their farmer cooperatives were insured with a satellite index (maize) and area yield index (cotton).
In addition to Swiss Re, another major international reinsurer, Hannover Re, carried the risk for PlaNet Guarantee's Burkina Faso area yield-based cotton product starting in 2013. Hannover Re's entry into the market is a major development that indicates the growing viability of index insurance in the West African market.
Agriculture in Burkina Faso is relatively under-financed, apart from the cotton value chain. Banks and large MFIs are reluctant to finance agriculture through small MFIs and cooperatives. Input loans are usually disbursed too late for the planting season leading to a late sowing phase for farmers and higher risk exposure.
Souleymane Zare | szare@planetguarantee.org