More than 12,200 small scale farmers in Ethiopia received a pay-out totalling $322,772 to help cover crop losses after unfavourable weather conditions were recorded via satellite technology.

This marks the first ever set of large pay-outs directly made to small scale farmers in the East African nation through a weather index insurance programme.

The pay-out was triggered by rainfall estimates measured by the same satellite technology used by America's National Aeronautics and Space Administration (NASA) agency.

Farmers from 45 villages in northern Ethiopia are beneficiaries of the R4 Rural Resilience Initiative which is backed by the United Nations World Food Programme, United States Agency for International Development (USAID), Rockefeller Foundation and Oxfam and seeks to help poor farmers protect their crops and livelihoods from the impacts of climate variability and change, including drought.

“Until now pay-outs have been for small pilots. But at this new scale, we are proving that weather insurance can be a successful and market-ready financial product,” said David Satterthwaite, senior global micro-insurance manager at Oxfam America.

“These kinds of products are the new face of development. They empower people to take chances and build a better future for themselves,” he added.

Uptake of the R4 project jumped from 200 households purchasing insurance in one village in 2009 to more than 18,000 households in 76 villages this year.

“With today’s changing climate, crop insurance has become a critical tool in building the resilience of some of the world’s most vulnerable populations. We can provide farmers with no better form of food security than by empowering them to protect themselves from the impacts climate change,” said Judith Rodin, president of The Rockefeller Foundation.

More than 80% of Ethiopia’s population earns its living from farming. And through the programme farmers can either purchase the insurance with cash or labour.

The R4 is also expanding to areas where farmers are capable of paying for insurance with cash, following its success in Ethiopia, the programme is set to expand to Senegal over the next four years.