Ethiopian Smallholders Face Climate Insurance Coverage Gaps

Insurers are becoming increasingly reluctant to underwrite climate-related risks for smallholder farmers, such as droughts and floods. Despite Ethiopia having nearly 20 million smallholder farmers, agricultural insurance currently represents only about one percent of the national insurance industry. Rising premiums are making it difficult for both governments and farming communities to justify the costs, even as the necessity for such protection grows due to increasing weather shocks. The situation highlights a significant gap in financial resilience for the country's agricultural sector.