R4 Rural Resilience Initiative Annual Report January - December Contents

R4 Rural Resilience Initiative annual report January - December Contents Executive Summary 1 The R4 Model of Managing Risk 3 Project Status Summary 5 Key Accomplishments 9 Monitoring and Evaluation 2012 13 Financial Transaction Result s 2012 (Ethiopia) 16 Risk Reduction Results 2012 (Ethiopia) 21 Challenges and Lessons Learned 24 R4 Senegal Pilot Roll-out Plan 27 R4 Policy Engagement Plan 34 Financial Progress 35 Conclusion 36 Appendix I: Partners and Institutional Roles 37 Appendix II: Payout in Ethiopia Press Release, December 2012 38 Appendix III: Media Citations & Resources 40 Appendix IV: Rural Resilience Event Series 43 Appendix V: Summary of Transacted Index 2012 (Ethiopia) 47 Cover: Women are planting seedlings in Tigray, Ethiopia. Eva-Lotta Jansson / Oxfam America Woman participating in a small women’s savings group in her village in Koussanar, Senegal as part of Oxfam’s Saving for Change program. R4 will work with these groups for the savings and credit components. Katie Naeve / Oxfam America Executive Summary For the 1.3 billion people living on less than a dollar a day who partners, launched what is now called the R4 Rural Resilience depend on agriculture for their livelihoods, vulnerability to Ini8a8ve, known as R4, referring to the four risk management weather and climate-related shocks is a constant threat to food strategies that the ini8a8ve integrates. Ini8ated in 2010, R4 builds security and well-being. As climate change drives an increase in on the ini8al success of HARITA (Horn of Africa Risk Transfer for the frequency and intensity of natural hazards, the challenges Adapta8on), an integrated risk management framework faced by food-insecure communi8es struggling to improve their developed by Oxfam America and REST, together with Ethiopian lives and livelihoods will also increase. The ques8on of how to farmers and several other na8onal and global partners 1 to enable build rural resilience against climate-related risk is cri8cal for poor farmers to strengthen their food and income security addressing global poverty. through a combina8on of improved resource management (risk reduc8on), insurance (risk transfer), microcredit (prudent risk In response to this challenge, Oxfam America and the Relief taking), and savings (risk reserves). Society of Tigray (REST), together with local and interna8onal 1. See Appendix I: ‘R4 partners and institutional roles’ for full list of R4 partners and institutional roles. R4 ANNUAL REPORT JANUARY - DECEMBER 2012 1 R4 has successfully expanded the HARITA opera8ons in Eth iopia, stakeholders to understand the social, economic and ins8tu8onal and has kicked-off the implementa8on of R4 Pilot 2013 in Senegal context have led to the selec8on of a pilot area and to the ini8al together with the World Food Programme (WFP). concep8on of program components. The program in Senegal is tailored to address gaps in exis8ng weather and climate risks In Ethiopia this year, R4 exceeded its goal of reaching 15,000 tools employed by food-insecure households. Through rigorous farmers by successfully extending insurance services to more than monitoring, evalua8on, and learning processes, the program in 70 villages 2 in 11 districts 3 in Tigray, Ethiopia thanks to its Senegal will adjust these tools as it scales up to new areas and innova8ve insurance-for-asset (IFA) component. This agricultural communi8es. season also marked the first-ever set of large weather index- insurance payouts 4 to small scale farmers in Ethiopia offered With its successful initiation on the ground, the R4 partnership through the program. The payout was triggered by rainfall is set to enable many more vulnerable people to graduate from es8mates measured by advanced satellite technology. Over food insecurity through a community-oriented, risk 12,200 farmers benefited from drought protec8on through management-focused, and market-based approach to achieve insurance payouts, receiving money when they needed it the rural resilience. most. The program’s strategic expansion to areas where farmers are capable of paying for insurance with cash, while con8nuing to The following report on our project expansion in 2012 serve the poorest and most vulnerable farmers through the highlights the project activities and results in Ethiopia, including government’s Produc8ve Safety Net Programme, is a progressive the insurance payout in the project this year and the Senegal step toward building a commercial insurance market in rural pilot design for the 2013 roll-out. We are grateful to The Ethiopia and toward sustainability. Rockefeller Foundation, Swiss Re, and USAID for their continued support of R4. In Senegal, na8onal assessments and a series of consulta8ons conducted with government, private sector and community 2. This report uses the word “village to refer to the Ethiopian term tabia, or subdistrict. Tabia is the Tigrigna language name for kebele, that is, the smallest administrative unit of the Ethiopian federal government (UN Emergency Unit for Ethiopia, 2003). Ethiopia’s administrative unit structure hierarchy follows: region (e.g., Tigray) > zone (e.g., Eastern Tigray) > woreda/district (e.g., Kola Tamben) > tabia/subdistrict (e.g., Adi Ha) > kushet. 3. The word “district” here refers to the Ethiopian term woreda. It is approximately equivalent to a district in other countries (Food and Agriculture Organization, 2010). 4. See Appendix II: ‘Payout in Ethiopia –press release–December 2012‘ for more details on the 2012 payout R4 ANNUAL REPORT JANUARY - DECEMBER 2012 2 e R4 Model of Managing Risk The R4 Rural Resilience Ini8a8ve is centered on integra8ng four (ii) prudent risk taking (credit and livelihoods diversifica8on); (iii) risk management tools into one resilience building approach; (i) risk transfer (insurance); and (iv) risk reserves (savings) (See community disaster risk reduc8on using food and cash for assets; figure 1). FIGURE 1. R4 is a holis.c approach to risk management • Increases land and labor produc8vity • Promotes resiliency via physical interven8ons and • Diversifies income into more value added social processes ac8vi8es • Covers insurable and uninsurable risks • Creates disposable assets for further risk • Customized at community level reduc8on and transfer $ • Robust across climate scenarios Prudent Risk Taking Risk Reducon R4 $ • Smoothes income Risk Reserves Risk Transfer • Stabilizes income • Builds community financial and social • Promotes quick recovery and prevents asset loss capital • Provides incen8ves for risk reduc8on • Facilitates risk-taking R4 builds on the innova8ons established by HARITA in Ethiopia, which made insurance affordable through integra8on with an exis8ng produc8ve safety net program. Evolution of R4 The R4 Rural Resilience Ini8a8ve strives to empower half a million The R4 Rural Resilience Ini8a8ve leverages and expands on the food-insecure people to improve their lives and livelihoods in the lessons of HARITA to bring together four key risk management next five years. The overriding strategic objec8ve of R4 is to tools in a holis8c approach that empowers food-insecure families. achieve long-term impacts well beyond the ini8al program. This This innova8ve approach is designed to con8nuously grow and will be accomplished through the dual sustainability outcomes of evolve, based on evalua8on and ongoing learning, to provide building a sustainable commercial market for risk management, further protec8on and empowerment to food-insecure and strengthening government support for rural resilience. households. R4 ANNUAL REPORT JANUARY - DECEMBER 2012 3 FIGURE 2. The evolu.on of R4 Safety Net + Risk Reduc.on Only (R1) Safety Net + HARITA (R3) Safety Net + Rural Resilience (R4) $ $ Prudent Prudent Risk Reducon Risk Taking Risk Reducon Risk Taking Risk Reducon R4 R4 R4 $ Risk Transfer Risk Reserves Risk Transfer Since 2005, Oxfam America’s savings-led microfinance program, Oxfam’s experience in community savings and gradually moving Saving for Change, has achieved broad success in crea8ng to an improved model that integrates savings as the fourth effec8ve, pro-poor savings structures for rural villages in Mali, component in the framework (see Figure 2). Senegal, El Salvador, and Cambodia. In Senegal, R4 is building on R4 ANNUAL REPORT JANUARY - DECEMBER 2012 4 Cows and goats head home as the rain approaches in Tigray, Ethiopia. Eva-Lotta Jansson / Oxfam America Project Status Summary Ethiopia The 2012 agricultural season marked the expansion of R4 to 76 “e rain in this area is very unpredictable - this year it villages in the Tigray region, including the 43 villages covered in came very late and ended early – so we got very little the 2011 agricultural season in partnership with REST. As a result from our harvest. For me, this insurance is like saving – of this year’s drought condi8ons in parts of the project area, you put in your money now and you get it back when more than 12,200 farmers in 45 villages received a share of the rain is bad and the crops don’t do well.” $322,772 in payouts. Because of varia8ons in the regional severity of the drought, some farmers in less severe loca8ons had G/Micheal Geday from Abraha Atsbaha village par8al payouts, while many, in the most badly hit areas, received full payouts. This is the first-ever set of large payouts to small scale farmers in Ethiopia triggered by advanced satellite villages, farmers were offered insurance through a cash-only technology used by the program. op8on. Of the total farmers who enrolled this year, 68 percent purchased insurance by paying 10

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