Non-Profit Charity Oxfam Teams Up with Etherisc for More Affordable Insurance to Sri Lankan Farmers
The efforts by Oxfam, a non-profit group, are working to eliminate poverty around the world, but this lofty goal is better accomplished with collaborations and other support. Etherisc, a blockchain startup, is deciding to contribute to the cause by working to support paddy rice farmers with more affordable insurance in Sri Lanka.
Etherisc’s work is primarily on bringing the Ethereum public blockchain to insurance. The annoucement that they would collaborate with Oxfam came at an event in London on Tuesday. The event, funded by CoinDesk, is the first “Blockchain for Social Good” gathering, and this news was a great way to kick off the festivities.
Coverage for individuals and families that only have very low income is often called “microinsurance.” When this insurance is placed on the blockchain, payouts are able to be made quickly to the impacted customers in the event of bad weather conditions and similar disasters. The costs of distribution and operation are made significantly smaller, which is usually the struggle that microinsurance is up against when it is used.
This solution will be used against one of the current weather index products, which Oxfam already supports in Sri Lanka. Michiel Berende, the insurance lead for Etherisc, said, “We are tapping into the existing distribution channels that Oxfam has, and looking at how blockchain can lower costs and increase efficiencies and make it easier for many more farmers to get access to this product.
The country director for Oxfam within Sri Lanka, Bojan Kolundzija, explained that Oxfam has already been working for years to support farmers within the area. He said, “We are excited to work towards the expansion of this innovative program with the help of blockchain technology and focused insurance industry experience from our partners Etherisc.
Each of the two entities will be involved with the one of the largest insurance brokers in the world, as they work to make affordable insurance into a reality. However, at the time of this article, the startup hasn’t been authorized to reveal the broker.
Setting up automated coverage on the blockchain is only the beginning, though it is this step that makes it easier to cover small scale farmers. In the next fact, the project wants to use the transparent features of blockchain technology to change the value chain for agriculture in Sri Lanka. This would let larger food producers to get involved as well.
Berende has been involved with grand-funded work for the small-scale farmers around the world for years. He commented, “We want to explore where we can bring in the large multinationals to see how they can support the risks of small-scale farmers.”
Blockchain-based risk pools could be a helpful way to bring in companies to participate from the supply chain, though aid organizations will probably be enticed as well. This type of pool holds funds in a smart contract, only releasing them when prerequisites are met.
Berende noted that these stipulations could be an effort to support risk prevention, or it could be a way to control the usable fertilizers or the purchase of seeds. He noted, “Now we have ways that we can be certain money will be spent the way it’s supposed to be spent and always reach the location it should reach.”