Uzbekistan- The global climate crisis doesn’t affect everyone equally, and farmers are among those most at risk. In Uzbekistan, a new EUR 1.9 million initiative aims to shield climate-vulnerable farmers through an innovative insurance scheme offering greater protection against natural disasters. The project, developed collaboratively by the Insurance Development Forum (IDF), the United Nations Development Programme (UNDP), the German Government, and the Uzbek Government, will deploy a multi-peril indemnity insurance product to benefit over 16,900 farmers and their families.
In Uzbekistan, agriculture is a crucial industry, contributing roughly 25% to the national GDP. While smallholder or “dehqan” farmers occupy just 13% of all cultivated land, they are responsible for an impressive 65% of agricultural output. However, their heavy reliance on small-scale farming makes them highly susceptible to climate change effects like droughts, floods, and unpredictable growing seasons.
The insurance scheme will assess damage through loss adjusters to ensure payouts accurately reflect the farmers’ real losses. By giving smallholder farmers access to this inclusive coverage, the initiative strengthens their resilience and reduces vulnerability to climate risks. A pilot program will roll out in Fergana, Namangan, and Andijan, with a planned expansion to cover more crops in the second year.
IDF members Europa Re and Swiss Re have partnered with local insurers Uzagrosugurta and Semurg to craft tailored agricultural insurance products. Nadica Jovanovska Boshkovska, Chief Project Officer at Europa Re, highlighted the value of blending local and global expertise. “By facilitating the transfer of local knowledge and establishing direct relations with beneficiaries, we can create insurance products that are not only more relevant but have a real impact on the lives of small-scale farmers in Uzbekistan.”
UNDP plays a pivotal role in implementation, providing technical assistance and risk financing solutions. Anas Fayyad Qarman, Deputy Resident Representative of UNDP Uzbekistan, emphasized that the project will “help build the resilience of the farmers and smallholders in the country.”
To amplify its impact, the InsuResilience Solutions Fund (ISF) will co-fund the initiative, bolstering expansion throughout Uzbekistan. Deputy Minister of Agriculture Alisher Shukurov noted UNDP’s essential partnership in addressing climate risks, emphasizing that this initiative will revolutionize the country’s agricultural insurance market.
Other nations have also pioneered similar insurance schemes. India’s weather-based crop insurance covers millions of farmers, while Mongolia’s livestock insurance shields over 600,000 animals. Mexico’s weather-based crop insurance protects against extreme weather, and European nations have also launched tailored insurance products.
However, designing effective agricultural insurance remains challenging. Reliable data on yields, weather, and historical losses are crucial but often hard to find. Governments, researchers, and private partners must work together to improve data collection. Building trust in insurers and raising awareness of available options require transparent communication, education, and local intermediaries.
Technology offers opportunities to streamline claims, assess risks, and cut administrative costs through satellite imagery, data analytics, and mobile platforms. IoT devices can trigger payouts based on preset indices, and blockchain boosts transparency and security.
By cultivating local insurance markets and sharing knowledge, the IDF, German Government, and UNDP aim to build a risk-informed decision-making process for farmers and governments alike. This project seeks not only to bolster farmers’ climate resilience but to uplift whole communities, proving the instrumental role of public-private partnerships in closing the global protection gap.
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