However, the impacts of extreme droughts, floods and other weather-related shocks are more severe for agropastoralists who lack the assets, plus access to credit and savings, to smooth the impacts of income losses, food price increases, and local employment and wage volatility during the bad years1. [...] However, the downside with bundling can be a lack of transparency for the farmer where there is insufficient information provided to agropastoralists about the terms and purpose of the insurance they are purchasing6. [...] In particular, regard for the significance and cost of capacity building of both stakeholders and smallholders, the value of farmer-centric design, the opportunities presented by bundling microinsurance with other reliable and trusted agricultural services, and the critical nature of clear roles and responsibilities in order to enable an effective pilot program. [...] Opportunities for partnership The next steps are to explore further, based on this feasibility study, the level of demand for crop and livestock insurance amongst households in the context of the specific risks they are facing, and identify an intervention point in an advanced and unconsolidated insurance sector in Kenya. [...] A payout is triggered if the realised yield for the area is less than the insured yield regardless of the actual yield on the insured’s farm.” R4 Rural Resilience Initiative Annual Report 2019 p.51: publications/r4-rural-resilience-initiative-annual-report-2019 Basis risk “Basis risk is the difference between an index and the shock that the index is supposed to be a proxy for.
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