Microfinance Focus, June 10, 2011: Global reinsurer, Swiss Re is committing USD 1.25 million as the Founding Sponsor of the R4 initiative - an Oxfam America and the World Food Programme (WFP) Microinsurance project to help poor rural Ethiopian farmers protect their crops and livelihoods from the impact of climate change.

Oxfam and WFP will be raising a total of USD 28million for the programme which will be expanding to three other countries in the first five years.

The project offers insurance-for-work activities intended to reduce farmers’ vulnerability to droughts. Farmers will have the option to pay their insurance premiums with their labour instead of cash. Participants will work on irrigation and forestry projects intended to reduce the impact of climate change for their villages.

Starting from November this year, R4 will be managing four risks for the farming community including community risk reduction, productive risk taking, risk transfer and risk reserves. Swiss Re will design and implement risk transfer solutions under this partnership.

Swiss Re has been working with Oxfam America since 2008 on ‘Horn of Africa Risk Transfer for Adaptation’ (HARITA) project in Ethiopia to provide weather insurance to poor farmers. Over 1300 household are currently taking insurance policies under this project.