We are excited to announce the launch of One Acre Fund Re, a reinsurance facility that will safeguard smallholder farmers in the face of extreme weather events’ devastating impacts on crop yields.
The reinsurance fund will provide a critical financial safety net for over 1 million smallholder farmers in 2024. By 2030, we hope to cover at least 4 million farmers, helping to bolster the long-term resilience of smallholders in sub-Saharan Africa.
One Acre Fund Re will leverage our on-the-ground presence and rigorous data gathering to design insurance products and direct payouts to more effectively respond to farmers’ context and experiences.
“Agricultural insurance can support lasting impact and resilience for small-scale farmers. With economic growth from agriculture 11 times more effective at reducing extreme poverty than any other sector in sub-Saharan Africa, One Acre Fund Re aims to support smallholder families to achieve long-term resilience.”
More than 2 billion people worldwide rely on subsistence farming, and this group is disproportionately affected by the devastating impacts of the climate crisis. Predictive models foresee rising temperatures in the coming decades, resulting in increased extreme weather events and overall, higher weather and seasonal variability: erratic rainfall across the sub-Saharan Africa region - with a higher likelihood of droughts, floods, and soil erosion will have negative impacts on millions of smallholder farmers. (Source)
Despite these increasing risks, subsidized agri-insurance is only available in four out of 54 countries across Africa, and currently only 3% of African farmers have insurance coverage for their farms. African smallholders - who face significantly more income shocks and extreme weather events - consequently must make do with far less financial protection than their counterparts in the Global North.
One Acre Fund Re is a partnership between social enterprise One Acre Fund, the International Finance Corporation (IFC), U.S. International Development Finance Corporation (DFC), and the African Risk Capacity Group (ARC).
One Acre Fund Re aims to transform the way financial entities support smallholders with risk transfer products. Profits will be used to increase impact and decrease climate risk. All resources will be ‘open sourced’ in the hope that others across the sector will follow our example.
To find out more, please contact Johannes Borchert: johannes.borchert@oneacrefund.org
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