Microinsurance, brick by brick.

Author:Norton, Michael

I sit in a village in northern Ethiopia, surrounded by foothills covered with eucalyptus and cactuses. Camels wander in packs and hawks fly overhead. Bone-thin oxen and donkeys plod around wearily in the harsh sun. Stone is the single resource with no shortage--the houses and terraces are made from it and many of the fields look closer to a rock pits than arable land. Some thunderheads settle in the mountains above, drenching them with moisture, casting thin gray clouds over the valley and offering us some momentary protection from the sun.

It is so bright here that photographs at midday are pointless, the glare from any surface simply washes them out. I wear long sleeves and hide in the wispy shade of acacia trees and listen to the proceedings in Tigrinya. "Thirteen months of sunshine," is a common phrase in Ethiopia. It seems like hyperbole until you realize there are, in fact, 13 months in the ancient Ethiopian calendar, which is almost as old as the branch of Christianity most Ethiopians still practice.

I work on a project to help poor farmers become more resilient to weather shocks, especially droughts. In Ethiopia, farmers rely on the uncertain arrival of rainfall to grow their crops and have little recourse if the season's rains prove inadequate. Individual farmers (or even village collectives) do not have the capacity to cope with an unpredictable, often pernicious climate. One solution to the persistent problem of food security is to give these farmers access to the same tools regularly used in our western world. If you wreck your car, you contact your insurance company. If you die prematurely, you have life insurance. If something bad happens, we have developed the means to deal with adversity. Farmers, no matter how poor, have some such means too, but there's a point where these systems get overwhelmed.

The Good Pays for the Bad

One cutting-edge solution involves microinsurance--a concept uniquely positioned to help the good years pay for the bad years. The farmers make a small payment every year, and if there is a drought severe enough to affect their crops, they get their money back at harvest time. It's not a gift or a subsidy, but a payment augmenting what they're already doing, a means of making their considerable efforts even more effective. It helps them when they can't help themselves--a bridge to better times.

Microinsurance may be the next economic revolution in Africa--the first being microfinance, or small loans to...

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