This document outlines key steps and strategies for developing index-based livestock insurance (IBLI) in Ethiopia. It discusses designing an IBLI product focused on livelihoods, identifying suitable contract structures and delivery mechanisms, addressing impacts of climate change, and using existing longitudinal household and satellite imagery data. Developing an IBLI research agenda would involve scoping missions, framing discussions, and leveraging existing data to design group-based insurance, explore ex-ante payout options, investigate delivery through local groups and NGOs given sparse financial institutions, and link IBLI to climate change adaptation and awareness programs.

1. Framing the Discussion: Developing IBLI Ethiopia Research Agenda Chantarat (Cornell University) Workshop on Developing Index-Based Livestock Insurance to Reduce Vulnerability due to Drought-related Livestock Deaths ILRI, Addis Ababa, Ethiopia 12 July 2010

3. Design a livelihood-focused IBLI

4. Identify suitable contract structure

5. Identify suitable delivery mechanisms

6. Address impacts of climate change and induce climate change adaptation

7. Key Strategies

8. Existing longitudinal household and satellite-imagery data

9. Scoping mission (2010)

11. Quarterly household survey (30 hhs/kebele)

12. 5 kebeles in 4 woredas

13. Desta (1999)’s Herd Recalls Data (1981-97)

14. Annual household herd recalls (~15 hhs/center)

15. 35-km radius of 4 town centersNote on Studied Sites: PARIMA’s Kebele Desta’s Town Center YEBELO Dida Hara Wachille Mega KENYA KENYA

17. Existing Risk Management Mechanisms

18. Ex-ante: migration, offtakes, supplement. feed/water

19. Ex-post: restocking, group-based social insurance*PARIMA (2000-02)

20. Existing Data NDVI and Livestock Mortality Satellite imagery NDVI (8km resolution, available every 10 days in real-time) Drought 2000 Drought 2009 Good forage condition 2010 Standardized NDVI Drought 84-85 Drought 90-91 Drought 99-00 Drought 05-06 Drought 09 Key Questions: Other longitude household-level data? Verification of past data? The need to collect recent herd recalls? Area livestock loss (%) (Recalls from Desta 1981-97, PARIMA 1998-2002)

22. Contract design/delivery/regulation Group-based IBLI Financial Institution Financial Institution Financial Institution i i i i i i i i i G G Individual IBLI Group as delivery channel Group as client + Substitute for absence financial facilities in remote locations + Use group learning to enhance education and extension + Use group rules to reduce individual basis risks + Enhance prospect for linking credit access with insurance -- Groups need to be well-established, participated by pastoralists

29. Existing projects that promote climate change adaptations:

30. Reforestation, Development of rangeland and/or water sources, Bush clearing to reduce rangeland degradation

31. Low community participation to date

32. Potential linkage of IBLI Ethiopia and Climate Change