Financialisation of risk among the Borana pastoralists of Ethiopia: practices of integrating livestock insurance in responding to risk

Tadesse, Masresha Taye (2022) Financialisation of risk among the Borana pastoralists of Ethiopia: practices of integrating livestock insurance in responding to risk. Doctoral thesis (PhD), University of Sussex.

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Pastoralists face multiple risks and uncertainties. Weather-related natural disasters, and economic, institutional and social factors have increased the risks and uncertainties pastoralists face in recent decades. Pastoralists have been responding to these in a variety of ways, including a range of local response strategies that aim to keep animals alive or help pastoralists restock. To add to these strategies, index-based livestock insurance (IBLI) has recently been offered by State and non-state actors. IBLI is a disaster risk finance instrument that employs a market-based concept through financialising drought risk. By remotely monitoring vegetation, the insurance pays out when the forage level falls below a certain threshold. This study investigates how different pastoralists in Borana, southern Ethiopia, combine livestock insurance with other response strategies.
The study explores pastoralists’ exposure to, perception of and responses to risks and uncertainties in an extensive pastoral system, Dire, and an agro-pastoral area, Gomole. It employs a mixed method approach by combining quantitative (stratified household survey, N = 300) and qualitative (case studies, ethnography, photovoice and elite interviews, N = 230) techniques.
The thesis interrogates the assumptions behind the insurance product’s design by investigating pastoralists’ actual practices. The insurance is designed to protect the most vulnerable pastoralists from the effects of drought; however, insurance is primarily purchased by wealthier males as a means of protecting large livestock holdings or diversifying livelihoods. Other, poorer and/or female pastoralists do buy insurance; but many drop out, while others never take it up.
The findings also demonstrate how insurance is used in combination with different responses: consumption smoothing (via adjusting daily food intake, grain purchases, and livestock slaughter), market-based responses (via feed purchases, distress sales, water purchases, and veterinary services) and resource-based responses (enclosing land, moving animals, and farming).
The thesis concludes that insurance is necessarily embedded in social and political economy relations and is always part of a broader set of responses. Insurance, therefore, must be understood not just as a technical market intervention, but also in the context of pastoral settings.

Item Type: Thesis (Doctoral)
Schools and Departments: Institute of Development Studies
Subjects: H Social Sciences > HC Economic history and conditions > HC0800 Africa
H Social Sciences > HD Industries. Land use. Labour > HD1401 Agricultural economics
H Social Sciences > HG Finance > HG8011 Insurance
Depositing User: Library Cataloguing
Date Deposited: 01 Mar 2023 12:24
Last Modified: 01 Mar 2023 12:24

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