Exploration of Index-Based Insurance for Smallholder Farmers in Mozambique: Turning Traditional Insurance on Its Head

The current seeds regulations in Mozambique specify, amongst other things, minimum required standards of germination rates depending on type, variety and stage of development of the seed We were aware that formal seed markets relied on research and development of seed breeds for assurance of the required quality and for innovations such as drought resistant varieties. Given the application of these essential risk control measures in this key input and the broad network of seed distribution channels, we believed that seed suppliers could play a critical role in the marketing of our proposed complimentary climate risk mitigation product to serve our common goals of protecting and increasing resilience of agricultural primary production. We explain in this book how we implemented this idea and the various questions that we explored in our index-based insurance extension project including the following: How could we enhance standard product guarantees of seed companies to offer additional protection against critical climate-related risks? How could we embed climate risk insurance in formal seed systems without adding cost for the end-benefi ciaries? What technology and distribution innovations should we consider for the purposes of ensuring that we can monitor cost-effectively covered risks? What value-adding services should be made available to support the risk carriers, the distribution partners and the smallholder farmers? How did we promote agricultural risk literacy using indigenous knowledge systems located in ancient African oral traditional stories that were part of the customs of our target population?