African farmers (representational image)

Rome : Vulnerable smallholder farmers will receive insurance payments totalling $1.5 million – the largest such payout to date – after poor rainfall triggered crop losses in Ethiopia, Kenya, Malawi, Senegal and Zambia, the United Nations World Food Programme said on Wednesday.

“In Malawi, more than 7,000 drought-affected families will receive an insurance payment worth $400,000.

“This is the first time that a weather index insurance programme has delivered payouts at such a large scale in Malawi,” said WFP’s country director Benoit Thiry.

Insurance is a key part of initiatives being undertaken to make farmers more resilient to weather-related shocks, he added.

The compensation means nearly 30,000 farming households can meet their basic needs including food purchases and payment of children’s school fees. Many smallholders will also invest a portion of the pay-out in seeds or fertilisers or in starting small-scale family businesses, WFP said.

The record payment was made possible under an innovative climate risk management scheme, the R4 Rural Resilience Initiative (R4) launched by WFP and Oxfam America in 2011 to compensate small farmers for weather-related crop losses and protect them against extreme weather linked to climate change, WFP said.

Under the R4 scheme, insurance payments are based on an index of rainfall, vegetation or yield estimates determining the extent of the losses incurred by participating farmers. Compensation is paid if the index falls below a pre-determined threshold as happened during the growing seasons in the five African countries, WFP said.

The initiative reaches over 57,000 farmers in Africa who are vulnerable to climate risk and combines four inter-linked elements: improved natural resource management, insurance, encouraging investment and savings and better access to micro-credit, WFP said.

Since 2011, over $2.4 million have been paid out to R4 participants in Ethiopia, Senegal, Kenya, Zambia and Malawi, according to WFP.

The programme is supported by the governments of the US, Switzerland, Belgium’s Flanders region, Britain, France, South Korea, Canada and Sweden.

—IANS/AKI