One Acre Fund has launched a new reinsurance fund, called One Acre Fund Re, set to provide a critical financial safety net for smallholder farmers in 2024.
It has been launched in partnership with the International Finance Corporation, US International Development Finance Corporation, and the African Risk Capacity.
The scheme is to cover over one million farmers, and will scale coverage to at least four million farmers by 2030.
The new resource will leverage One Acre Fund’s on the ground presence and rigorous data gathering to design insurance products and direct payouts in a way that more effectively responds to farmer experiences.
Johannes Borchert, Global Head of Risk & Resilience at One Acre Fund, said: “We are planning to roll out One Acre Fund Re in 2024 to five out of nine country programs. From year one, it will benefit over 1m farmers across Africa.
“As this facility grows, we will extend our services to farmers in all our areas of operation and beyond. We believe the data, experience and underwriting capacity we bring should be extended to offer climate safety nets to as many smallholder farmers as possible.”
More than two billion people worldwide rely on subsistence farming; a group disproportionately affected by the devastating impacts of the climate crisis.
Disasters have caused about $3.8 trillion worth of lost crops and livestock production over the past three decades globally, yet only 3% of African farmers have insurance coverage, analysts highlight.
Annie Wakanyi, Director of Global Government Partnerships at One Acre Fund, commented: “Smallholder farmers make up one of the most climate-vulnerable populations on the planet, facing increased frequency of climate events with devastating consequences on yields and household stability.
“This insurance offer has the potential to provide smallholder families with a strong safety net when these events occur; yet current market failures mean that most insurance products are too expensive or too limited in coverage to support meaningful resilience. But it doesn’t have to be this way.
She added: “Agricultural insurance can support lasting impact and resilience for small-scale farmers. With economic growth from agriculture 11 times more effective at reducing extreme poverty than any other sector in sub-Saharan Africa, One Acre Fund Re aims to support smallholder families to achieve long-term poverty reduction and resilience.”
One Acre Fund supports smallholder farmers to build more food secure, climate resilient and prosperous communities. It takes an adaptation-first approach by sharing climate-smart farming practices with smallholders to increase farm yields sustainably and diversify income streams, and by providing safety nets to ensure financial stability.
During COP28, the group stated it will call for global governments, policymakers, investors and the general public to engage with and invest in smallholders.
