The R4 Rural Resilience Initiative (R4)[1] aims to increase climate resilience, enhance food security and increase financial inclusion for rural communities in developing countries.The activities are built on the success of Horn of Africa Risk Transfer for Adaptation (HARITA) (2009-2011) in Ethiopia and from 2011 onwards, the activities are expanded within Ethiopia and other African countries as part of the R4 Rural Resilience Initiative led by Oxfam America and WFP.[2]
Scope
Country
Pilots conducted in Ethiopia, Senegal, Malawi & Zambia
For Oxfam: Swiss Re, Rockefeller Foundation; Margaret Carghill Foundation; for WFP: USAID, French Government, Cartier Foundation, , Swiss Cooperation, Norway Ministry of Foreign Affairs
Implementer(s)
World Food Program (WFP) and Oxfam America
Final beneficiary
The farmers in the targeted region
Inputs and activities
1) Inputs: Donor funds; labor; knowledge; equipment, etc.; 2) Activities: Farmers access weather index insurance by paying with their labor through Insurance-for-Assets (IFA) schemes. Farmers create Disaster Risk Reduction assets by working on risk reduction projects.[4]
On which level are RBCFs used?
At project and programme level: 1) The implementing partners are paid against verified deliverables; 2) The farmers receive food coupons and insurance contracts after delivering verified amount of labor on risk reduction community projects.
Disbursement linked indicator(s)
Days of work
Note: This case study focuses on R4 in Ethiopia.
Program Design: The program is structured as follows. In the first year of enrolment, the farmers can pay 100% of the insurance premium in labor. Starting from the second year, depending on how many years they have been in the program, the farmers are required to pay 10% or 15% in cash and the rest of the premium in labor (the amount of money corresponding to the amount of labor value will be paid by the implementers to the insurance companies). Farmers work in risk reduction projects, e.g. soil and water conservation structures as well as tree planting to increase resilience in the local community. Support instruments offered by the initiative mainly cover funding that helps farmers to have access to agricultural insurance and financial literacy trainings. The poorest farmers (which is signaled by joining the governmental Productive Safety Net Programme (PSNP) in the region) cover 100% of the insurance premium frequently by 100% in labor or a growing percentage of premiums (in cash in case they’re returning participants) to obtain weather-indexed insurance for their crops.
Figure 19: Program design of the R4 initiative
Source: Simplified Ethiopia case based on Index Design to Payout – Tigray flowcharts from WFP
The initiative has combined multiple development goals, namely adaptation to climate change, food security and financial inclusion. Farmers benefit from insurance products. The risk reduction projects could improve resilience of the local community. In addition, insurance products as well as more frequent use of cash could be introduced into the community. There are also savings and loan services to the farmers attached to this initiative. The farmers are organized into saving groups. Because of the risk profile of the insured farmers are improved, Microfinance Institutions (MFIs) are more willing to offer credit to them.
Purpose / Goal
Outputs
1) Number of risk reduction - assets creation activities are realized, e.g. soil and water conservation structures as well as tree planting; 2) Number of farmers subscribing to insurance; 3) Number of farmers participating in financial literacy trainings.
Outcomes
1) Farmers benefit from insurance products, gain financial literacy and cash economy would be introduced into the community. 2) Increase financial inclusion.
Impacts
Increase climate resilience and enhance food security;
On which of these levels are measurable indicators defined / formulated?
Output
RBCF Design & DLIs: In this initiative, the RBCF components occur on the following levels. On the “macro” level, instead of giving out money for resilience directly, the funders set up a system to allow the locals to work for risk reduction activities. The funding transferred to the insurance companies depends largely on the number of farmers enrolled and the labor they have provided in the risk reduction projects. In addition, the implementing partners are paid against verified deliverables. The projects are monitored though dashboards for outputs (e.g. completion status of the assets) and outcomes. The implementing partners are in charge of monitoring and verification of the quality of work. They face financial consequences for non-performances. On the “micro” level, the poorest farmers receive coupons after delivering verified amount of labor.
Support instrument
Description
Type of support granted:
The program has multiple instruments. The supports include 1) Funding which facilitates farmers to have access to agricultural insurances; and 2) Financial literacy “trainings”.
How is the payment related to the goal(s)?
For Farmers: One day of work is valued at x dollars (depending on the countries). Information from a receipt example shows that the farmer is assigned a type of work, he/she worked 21 days, cost/day is 12 (detailed work content and currency is unknown as it is written in the local language), with a total value of 252.[1]Farmers work a number of days enough to cover for the insurance premium.
How is the payment related to the goal(s)?
For implementing agencies:The community agrees on assets that could reduce the impact of climate change, e.g. building water conservation assets. The projects are monitored though dashboards for outputs (e.g. completion status of the assets) and outcomes. The two implementing partners (both NGOs in Ethiopia): The Relief Society of Tigray (REST) in Tigray region and Organization for Rehabilitation and Development in Amhara (ORDA) in Amhara region are in charge of monitoring and verification of the quality of work. They face financial consequences for non-performances.
[1] This section is mainly based on the interview with Azzurra MASSIMINO (Programme Policy Officer for Climate and Disaster Risk Reduction Program in World Food Program) and official program report: R4 Rural Resilience Initiative Annual Report 2015. Retrieved from https://www.wfp.org/content/r4-rural-resilience-initiative-2015-annual-report
[4]R4 Ethiopia also includes access to financial services such as saving groups and revolving credit schemes. We focus on results-based related activities in the report.
Blog » R4 Rural Resilience Initiative (R4)
R4 Rural Resilience Initiative (R4)
The R4 Rural Resilience Initiative (R4)[1] aims to increase climate resilience, enhance food security and increase financial inclusion for rural communities in developing countries. The activities are built on the success of Horn of Africa Risk Transfer for Adaptation (HARITA) (2009-2011) in Ethiopia and from 2011 onwards, the activities are expanded within Ethiopia and other African countries as part of the R4 Rural Resilience Initiative led by Oxfam America and WFP.[2]
Program Design: The program is structured as follows. In the first year of enrolment, the farmers can pay 100% of the insurance premium in labor. Starting from the second year, depending on how many years they have been in the program, the farmers are required to pay 10% or 15% in cash and the rest of the premium in labor (the amount of money corresponding to the amount of labor value will be paid by the implementers to the insurance companies). Farmers work in risk reduction projects, e.g. soil and water conservation structures as well as tree planting to increase resilience in the local community. Support instruments offered by the initiative mainly cover funding that helps farmers to have access to agricultural insurance and financial literacy trainings. The poorest farmers (which is signaled by joining the governmental Productive Safety Net Programme (PSNP) in the region) cover 100% of the insurance premium frequently by 100% in labor or a growing percentage of premiums (in cash in case they’re returning participants) to obtain weather-indexed insurance for their crops.
RBCF Design & DLIs: In this initiative, the RBCF components occur on the following levels. On the “macro” level, instead of giving out money for resilience directly, the funders set up a system to allow the locals to work for risk reduction activities. The funding transferred to the insurance companies depends largely on the number of farmers enrolled and the labor they have provided in the risk reduction projects. In addition, the implementing partners are paid against verified deliverables. The projects are monitored though dashboards for outputs (e.g. completion status of the assets) and outcomes. The implementing partners are in charge of monitoring and verification of the quality of work. They face financial consequences for non-performances. On the “micro” level, the poorest farmers receive coupons after delivering verified amount of labor.
For Farmers: One day of work is valued at x dollars (depending on the countries). Information from a receipt example shows that the farmer is assigned a type of work, he/she worked 21 days, cost/day is 12 (detailed work content and currency is unknown as it is written in the local language), with a total value of 252.[1] Farmers work a number of days enough to cover for the insurance premium.