The collaboration aims to provide insurance coverage for smallholder farmers in Zambia and Malawi. Credit: Tim Mossholder/Unsplash.

Global Parametrics, a company owned by Swiss-based CelsiusPro Group, has partnered with One Acre Fund, an organisation that provides financial services and training to smallholder farmers. 

The collaboration aims to provide insurance coverage for smallholder farmers in Zambia and Malawi, safeguarding them financially from crop losses caused by drought. 

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Global Parametrics and One Acre Fund have created a water-balance index that determines insurance payouts.  

This index utilises data collected and verified by One Acre Fund directly from individual farmers. 

It assesses the equilibrium between rainfall and evapotranspiration during a defined time frame, providing an indicator of water availability for crops.  

The index also leverages weather data sourced from external third-party providers. 

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During this season, payouts for droughts triggered by the El Niño phenomenon have already been distributed, benefitting approximately 77,600 smallholder farmers in Zambia and Malawi, Global Parametrics said.  

The total payments amounted to more than $812,600. 

The Natural Disaster Fund (NDF), overseen by Global Parametrics, provides risk capacity for One Acre Fund’s portfolio of loans to smallholder farmers. 

The NDF, supported by UK and German governmental entities through a public-private partnership, is tasked with providing risk coverage for parametric solutions.  

These solutions aim to strengthen climate resilience and protect poor and vulnerable communities from natural catastrophes. 

Germany’s Hannover Re shares the risk with the NDF. 

CelsiusPro Group CEO Mark Rueegg said: “Thanks to the index-based solution, farmers do not need to present proof of loss or undergo lengthy damage assessments. If the water balance index falls below a specified threshold, payouts are triggered.”  

One Acre Fund Zambia country director Luke Viljoen said: “Smallholders manage the majority of Zambia’s arable land, so supporting them and building their resilience is paramount. With our growing base of farmers, more can access innovative solutions that protect them from drought and floods. 

“Providing them with much-needed financial relief will help accelerate sustainable agriculture transformation and improve agricultural resilience for the nation.” 

CelsiusPro acquired Global Parametrics in September 2023.