Documents

Annexes 3.1 & 3.2
RFP Document

Overview

The cattle corridor of Uganda has experienced dramatic land and vegetation degradation driven by a combination of inappropriate land use (agricultural encroachment into reserves) and the weakening of pastoralism as a production system. These are in turn driven by high population growth, high dependence on natural resources coupled with poor resource management, and poor economic development, poverty and more recently climate change. Pastoralism is the main economic activity in the corridor, but crop and charcoal production are also significantly sources of income from utilization of natural resources. The Government of Uganda through the Ministry of Agriculture, Animal Industry and Fisheries (MAAIF) with support from United Nations Development Program (UNDP) and the Global Environmental Facility (GEF) is implementing the project "Enabling environment for sustainable land management (SLM) to overcome land degradation in some of Uganda’s Cattle Corridor Districts, namely Kamuli and Nakasongola. The overall goal of the project is Sustainable Land Management providing the basis for economic development, food security and sustainable livelihoods while restoring the ecological integrity of the Cattle Corridor ecosystem. The objective of the project is to provide land users and managers with the enabling policy, institutional and capacity environment for effective adoption of SLM within the complexity of the cattle corridor production system. This objective will be achieved through strengthening the policy, regulatory and institutional frameworks to support sustainable land and charcoal management in the cattle corridor, use of Knowledge as a basis for land use planning and improvement of dry land farming and pastoralism, and, facilitation of Local economic development through diversification and access to finance and insurance. A specific Output 3.2 is targeted at increasing the viability of the cattle corridor production system via access to micro-finance, credits and insurance: This project deliverable was designed to be delivered through three sub-outputs; each focusing on a particular issue namely micro finance; access to credit and agriculture insurance. A Sub-output was therefore developed specifically to ensure that Insurance for livestock and selected crops is piloted in the focus districts of Kamuli and Nakasongola. Under this sub-output the project is to pilot weather index based insurance schemes for both livestock and selected crops. The intention is to facilitate the formulation and piloting of the insurance schemes working out important design issues such as what type of insurance should be offered, whether it should be obligatory, whether premiums should be the same across the whole pilot area or be adapted to localized and so different levels of risk, and what the institutional structure should be to ensure sustainability. This is to enable insurance providers with critical information on which to base the scheme such as researching the frequency and impact of catastrophic events and educating participants about the value of insurance. In particular, the project is to facilitate an insurance service that is designed to minimize the effect of adverse agricultural risks in agricultural production, in particular, extreme weather changes are not yet well developed. The UNDP in partnership with MAAIF is therefore, seeking the services of an insurance company whose assignment will be to pilot a weather based index insurance so that agriculture becomes attractive for financing. The aim of such a company should be to put aside their competitiveness and share the high risks associated with agriculture production by providing insurance cover to the farming communities in Uganda for the promotion of investments in the agricultural sector Through this pilot, the insurance company will define optimal working arrangements to ensure that pastoralists and agriculturalists participate in the pilot index based insurance scheme, and that evidence of feasibility of such an insurance scheme’s potential as means of increasing number of crop and livestock farmers accessing financial and credit services is generated and documented.