Poor farmers in emerging economies often face a high risk of losing crops to drought or other weather-related catastrophes. Agricultural index insurance is a promising tool to transfer risks for smallholder farmers, allowing them to invest more in productive inputs and recover better in the face of shocks. However, households currently have no way to tell whether and when a contract will fail them in a time of need just by looking at its terms and cost. It can take years before a catastrophe makes the difference clear. By then it’s too late.
The University of California, Davis is partnering with the Nairobi-based Regional Center for Mapping of Resources for Development (RCMRD), with the support of USAID, to establish Quality Index Insurance Certification (QUIIC) in East Africa. QUIIC has the potential to revolutionize how agricultural index insurance safety. For individual farmers, QUIIC certification ensures a basic level of transparency, making clear the difference between an index insurance contract that offers real value from one that doesn’t. It also allows donors and governments to invest in products certified to have the potential to accelerate and protect economic growth.