Strengthening resilience of South African Farmers

A cooperation between Germany and South Africa to introduce an insurance for smallholder farmers

October 09th, 2019
Kristin Leckström, News from Berlin
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A grant agreement between the InsuResilience Solutions Funds (ISF) and the South African Land Bank Insurance Company and CelsiusPro aims at providing smallholder farmers in South Africa access to climate risk insurance.

The agreement was signed by the Frankfurt School of Finance and Management on behalf of the aforementioned parties on 19th September 2019.  This joint initiative is part of an important implementation program to protect the livelihood of South African farmers against weather-related risks often caused by climate change.   

South Africa experienced a severe drought between 2015 and 2016, which drastically reduced water supply and agricultural production. This affected maize and other crops and animals were in danger of starving. The risk of food shortages combined with losses in income hit hard especially against smallholder farmers and their families.  

The grant agreement will now offer farmers effective insurances against extreme weather events such as drought. The Ministry of Agriculture in South Africa has a disaster relief program in place already, but it has proven insufficient to provide financial aid to the large number of farmers in need. Due to a delay in implementation of the program, the economic loss caused by the drought is still a large issue.

The new agreement is financed by KfW Development Bank, which is supported by the German government and it has innovative components that differs from earlier projects. With support from the InsuResilience Solution Fund it is possible to provide fast payouts of financial support.

This cooperation between Germany and South Africa is also an example of the action plan for resilience and adaptation developed at the UN Climate Action Summit convened by the UN Secretary-General António Guterres on 23rd September.


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