Innovation case study: R4 Rural Resilience Initiative

By Oxfam
Medhin Reda, a farmer in the Tigray region of Ethiopia, is a participant of the teff crop micro-insurance pilot in her community. Photo: Eva-Lotta Jansson / Oxfam America

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R4 helps farmers and communities manage risk using four strategies: improved resource management (risk reduction), insurance (risk transfer), microcredit (prudent risk taking), and savings (risk reserves).

Oxfam America has supported microfinance activities in Latin America, Asia, and Africa for years. Building on this experience, Oxfam has embarked on an ambitious effort to bring microinsurance to vulnerable smallholder farmers. Oxfam has partnered with Swiss Re and organized a range of other actors, including Columbia University, local insurers, researchers and development organizations, and the Ethiopian government, to develop a sustainable and scalable microinsurance product for smallholder farmers in Ethiopia affected by climate change. The insurance product development is closely tied to Oxfam’s existing risk reduction programs that have deep roots in the community. To ensure sustainability, the process has been participatory and demand driven. The initial stages of the program have concluded that weather index insurance can help farmers reduce their negative risk exposure and feel more comfortable taking on productive risks (such as switching to high-yield seeds). Prudent risk taking should help prevent a slide into poverty and increase farmers’ ability to adapt to climate change. Following on two years of successful piloting, the World Food Program and Oxfam entered into a five-year partnership to expand microinsurance to three new countries.

The project (known as R4) is unique in developing a holistic risk management framework that includes risk reduction, risk transfer (insurance), prudent risk taking (credit), and risk reserves (savings). Read more about the R4 project.

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