NASA Harvest Partners with Novel Insurance Product Climate Smart Coffee

NASA Harvest has been a partner to a novel insurance product and program launched in Kenya run by Sprout, Inc, called Climate Smart Coffee, where smallholder coffee farmers are protected from the impacts of climate change with novel climate tools. These climate tools support farmers to invest in climate smart agricultural practices such as increased agroforestry, e.g. planting of shade trees, to reduce use of chemicals in pest and disease management and fertilizer. Over time, these investments should boost production despite the risks of climate change. 

Coffee map produced using open-source satellite and weather data. Map credits Fangjie Li, Shabarinath S Nair, Inbal Becker-Reshef. 

NASA Harvest’s role was to improve the accuracy of these climate tools by supporting the creation of a novel satellite imagery-based coffee croptype map in Kenya. Increased accuracy means lower costs for farmers and reinsurers, while maintaining trust with low-income producers.

"We used open-source satellite imagery, elevation and weather data to accurately identify which farms are cultivating coffee", said Fanjie Li, researcher at NASA Harvest. This map is used by Sprout in its climate tools to filter satellite imagery and produce coffee-specific climate data. "Our aim is to further improve the mapping accuracy by including high resolution imagery and monitor changes in coffee planting practices over multiple years" says Shabarinath S Nair, researcher at NASA Harvest who is leading the project.

IMPACT

The insurance product was launched just this season, covering over 1,000 smallholder farmers in Central Kenya, all living within the bounds of the coffee croptype map. The newly launched product, which stems from collaborative efforts at the Lloyd’s Lab Launchpad Pitch, provides swift payouts triggered by specific weather events, offering immediate financial support to mitigate the risks of crop failures.  

       Climate Smart Coffee Field Team 2024

Sprout, leveraging its expertise in technology-driven insurance solutions in the agricultural sector, uses satellite data and machine learning to assess historical weather patterns, empowering farmers to maintain productivity despite climate challenges. Liberty Mutual Re has supported the solution since its inception, through shaping the structure of the coverage and the capacity allocation.

The product is designed not only to protect against climate risks but also to address the specific needs of coffee growers, incorporating real-time advisory services to assist farmers in adapting their farming practices based on weather forecasts, thereby enhancing their resilience. Sprout has invested in a Whatsapp Chatbot that provides farmers information and collects real-time circumstances of coffee farmers, such as pest and disease threats. 

The innovative scheme, in which coverage premium is funded by global coffee buyers, supports local operations while minimizing operating costs for Kenyan farmers. This approach ensures that farmers can quickly recover from adverse conditions, maintaining their livelihoods, but also to invest in climate smart agricultural practices to build on-farm resilience. By keeping financial resources within Kenya and supporting local agriculture, the new insurance product aims to bolster the local economy and promote sustainable farming practices, offering a crucial safety net for farmers facing increasing climate variability.

Sprout monitors the insurance index throughout the season and offers stakeholders access to this information through their insurtech platform.

The product launched with the support of Kenyan insurer Britam aligning with regulatory and industry efforts to close the insurance gap and provide more comprehensive coverage options for local farmers. Tom Gitogo, Managing Director and CEO, Britam Group, said:

“As part of our sustainability strategy, we aim to champion innovative microinsurance solutions that not only safeguard vulnerable populations, such as small-scale farmers, from climate risks but also deepen financial inclusion among the low-income population. These emerging risks are underserved in the market and to address this gap, Britam partners with local and global organizations to develop innovative solutions.”

NASA Harvest and Sprout are committed to expanding this program in more regions in Kenya based on its usefulness in insurance. Sprout has ambitions to scale this program to 1 million farmers by 2030 using higher resolution imagery, experiments on shaded coffee, production forecasts and more.

Sprout, Inc is a US-based insurtech that has a mission to improve climate resiliency of smallholder farmers through the design of climate tools that increase production, build climate awareness and support investments in climate smart agriculture. 

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