The Educa*on of Co/on Farmers in Mali

Transcription

1 The Educa*on of Co/on Farmers in Mali Marc F. Bellemare Duke University Catherine Guirkinger University of Namur Michael R. Carter University of California, Davis Ghada Elabed University of California, Davis Index Insurance Innova*on Ini*a*ve Technical Workshop Washington, DC May 2011

2 Introduc)on I described earlier the double trigger contract we have adopted for our study of index insurance for co/on producers in Mali. The advantage of such a contract are that (i) it reduces basis risk; (ii) it completely eliminates false posi*ves; and (iii) it greatly reduces the number of false nega*ves.

3 Introduc)on This means that we need to be especially careful regarding how we go about educa*ng stakeholders especially farmers about the contract we have chosen to implement. That said, such a contract is also more complex than a lump- sum indemnity contract, a single strike point contract, or a double strike point contract.

4 First Workshop: October 2010 We first started with a stakeholder workshop last October, to announce and explain the project in as detailed a way as we could at that *me. That workshop convened people from I4, PlaNet Guarantee (our implemen*ng partner), Oxfam, Allianz, etc., but also a number of representa*ves from producer organiza*ons. The la/er were especially helpful when we later went to the Bougouni and Dogo regions to acquire more yield data.

5 First Workshop: October 2010 As part of that first workshop, we discussed: 1. Why an index insurance contract for co/on producers? 2. What is an index insurance contract? 3. A descrip*on of the pilot. We then split the a/endance into two discussion groups: one on ins*tu*onal coordina*on, and one on the implementa*on of the index insurance.

6 First Workshop: October 2010 I like to think of that first workshop as giving a brown bag seminar in your home department. That is, it s a good way to see if you can past the laugh test. It s also a good way to get early feedback to make sure everyone is on board with and understands the objec*ves of the project, which in turn allows correc*ng early on.

7 First Workshop: October 2010 The representa*ves from producer organiza*ons seemed to be familiar with the idea of insurance, as the CMDT (the co/on parastatal) makes the purchase of life insurance compulsory. One representa*ve likened index insurance to an amulet that one purchases for protec*on when traveling. It was par*cularly instruc*ve to see stakeholders reac*ons when we explained all possibili*es, especially the possibility where one s coop does not do well but the zone does well, so that one does not receive a payout.

8 If the first seminar was equivalent to a brown bag, this was equivalent to an invited seminar. The first step, of course, was to give a broad overview of the idea behind index insurance, the double trigger contract retained for impact evalua*on, the sectors to be studied, the sampling methodology, the pricing structure of the contract, and the *meline for the project.

9 The second part of the workshop aimed at training eight trainers recruited by PlaNet Guarantee and Oxfam These trainers will be in charge of training people on the ground: 16 people at the zone level (ten for Bougouni, and six for Dogo), and 136 people at the village level (village informa*on people, or VIPs).

10 By the end of their training, the eight trainers are expected to understand 1. The idea of index insurance 2. The idea of area- based yield insurance 3. The characteris*cs of the contract retained for implementa*on 4. The sector, zones, and coop selec*on criteria 5. The channels through which the insurance contract is purchased and through which it pays out 6. The risks covered and those not covered

11 The first session was devoted to explaining the no*on of average and to applying it to an agricultural produc*on zone. This was done using colored balls. In this session, the trainers also learned about the determinants of area yield, and they were trained on how to explain the concept to the VIPs.

12 The following diagram was used to elicit the no*on of average:

13 When training VIPs, the trainers will use real bags of co/on. Moreover, when training VIPs, the trainers should split co/on producers in several groups and hand out play money. Then, in a bag labeled coop yield, ten colored balls are placed, each color represen*ng an outcome: black (1) for very low, red (2) for low, gray (3) for normal, green (2) for high, and blue (1) for very high yields.

14 The second session was devoted to explaining the no*on of insurance. Par*cipants were allocated between hypothe*cal coopera*ves. Coops then decided whether to buy the insurance contract, and a simula*on is run with the colored balls in which par*cipants are shown how to compute (i) gross coop income, given the random draw and a price per kg of 200 FCFA; (ii) coop debt condi*onal on whether or not insurance was purchased; and so (iii) coop s net income.

15 Coopera)ve Insurance Yield Gross Income Debt per ha Net (kg/ha) (Yield*200 (Insurance Costs Income FCFA) #1 Yes Average 1,100x200= 9,500 FCFA) 95,000+9, , ,000 #2 Yes High 1,300x200= 95,000+9, , ,000 #3 Yes Average 1,100x200= 95,000+9, , ,000 #4 No High 1,300x200= 95, , ,000 #5 No Very High 1,550x200= 95, , ,000

16 The same idea was then repeated for the second trigger, i.e., the yield at the zone level, using addi*onal colored balls: blue (1) if the zone- level yield is 200 kg/ha below, yellow (2) if it is equal, and black (1) if it is 200 kg/ha above the coop- level yield.

17 Aher introducing the idea of coop- level yield and the idea of zone- level yield sequen*ally, the no*on of a double trigger contract was introduced: 1. 9,500 FCFA/ha/person 2. Two triggers (coop- and zone- level triggers) 3. Payout of 95,000 FCFA/ha/person (enough to cover input package)

18 Key terms were the introduced in Bambara (e.g., coopera*ve becomes koperacfu), and the insurance purchase procedure and channel was explained. Aher the workshop, each trainer will be in charge of training the VIPs and visi*ng each coop for a training session during which a vote takes place regarding whether the insurance wants to buy the insurance contract. This process will be supervised by Oxfam and PlaNet Guarantee via , telephone, and field visits.

19 The third session was devoted to yet another simula*on by the par*cipants, to a discussion of the technical terms, to a Q&A and to feedback by the par*cipants. We also wrote the storyline of a comic strip aimed at explaining the idea behind our insurance product, had the comic strip made, and the storyline translated into Bambara for the use of co/on producers. Finally, a training manual and a training brochure or factsheet we wri/en.

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