Joint development of an innovative risk transfer mechanism by One Acre Fund, Munich Re and sfr-consulting
Seventy percent of the world’s poorest people depend on farming for their livelihood. Yet most of these farmers live in remote areas of the world, and do not have access to basic agricultural tools and training. The only permanent way to end hunger in Sub-Saharan Africa is to invest in solutions that sustainably increase farm production.
One Acre Fund is a nonprofit organization that is working with more than 500,000 smallholder farming families to do just that. The organization offers a comprehensive bundle of farm inputs, financing, and training to smallholders, and those who enroll on average see a 50 percent increase in their crop yields after just the first year. To support this expansion, sfr-consulting - a member of Munich Re Group - developed an innovative risk transfer mechanism which helps to protect One Acre Fund’s program model. Although the impact of climate has been identified as an influential component in farm production, experience has shown that a bouquet of various risk factors contributes to the farmers’ performance.
We are excited about this innovative insurance solution, as it helps One Acre Fund manage the risks of working in rural, unbanked markets, which are also greatly affected by climate change