A SECOND rescue package is to be delivered to drought-stricken farmers — this time an insurance payment to chilli farmers in Pakistan.

The payment of £261,243, secured by Tearfund from its parametric insurance, follows an £80,000 payout to smallholders in Malawi in February (News, 21 February). Parametric insurance is paid out on the basis of “trigger” events, most commonly natural disasters such as earthquakes, floods, and droughts. The insurer makes a predefined payout for a specific event instead of assessing the actual loss. Payouts are much faster.

The payment for the farmers in southern Pakistan was triggered by a heatwave and reduced soil moisture, measured by satellite data.

Pakistan is the fourth-largest producer of chilli worldwide.

Tearfund said that the insurance money would be used to support 3000 families with food relief, clean water, and hygiene kits, and suitable seed for planting.

Its country director for Pakistan, Jonathan Johnson, said: “What we’re seeing now is the beginning of a drought that could have devastating consequences for livestock as well as for human lives and wellbeing. Now that a payout has been triggered by these conditions, we are able to act quickly and in anticipation of the very worst scenarios.

“Traditional models of aid can be too slow to prevent the worst of a hunger crisis. This new way of pre-emptively financing relief efforts protects small-scale farming communities from drought induced hunger and secures the progress Tearfund has made building resilience to the climate crisis.”

The first payout in Malawi helped farmers to replant drought-resistant crops, which are now being harvested.

Tearfund is working in partnership with the risk-management company Global Parametrics and the not-for-profit organisation Humanity Insured to provide the new source of financing, aimed at reducing the impact and cost of humanitarian crises.

The chief executive of Humanity Insured, Charlie Langdale, said: “Humanity Insured exists to make insurance accessible to stop people from falling into poverty because of disasters. The recent drought-triggered payout in Pakistan for smallholder farmers is a clear example of how innovative insurance can deliver immediate, lifesaving support. Families will now have access to food, clean water, and livestock vaccinations — critical resources in the face of extreme conditions.”