Jordan is one of the most water-scarce countries in the world, making it extremely vulnerable to climate change. A World Bank study estimated that a reduction in water supply and climate-related changes in crop yields could reduce Jordan’s GDP by up to 5.2% according to 2022 World Bank data. Jordan's agricultural sector is major employer of women, and farmers, particularly women in farming, are on the frontlines of runaway climate change.  

For most women in rural agricultural communities, the idea of insurance remains foreign. However, climate change is increasing the risks of relying on traditional farming methods. To address these gaps, UNDP started working with farmers to increase their understanding of climate change and financial protection tools, such as insurance, as a way to build climate resilience.

In 2023, UNDP’s  Inclusive Insurance and Risk Financing project, started supporting the Government of Jordan’s efforts to strengthen the role of the Agricultural Risk Management Fund (ARMF) and the implementation of Jordan’s new Takaful Law to make Takaful solutions more widely accessible. Takaful is a form of insurance in accordance with the regulations and principles of Islamic Jurisprudence— often preferred by individuals in Muslim-majority countries who seek financial services that comply with Islamic principles.

The project, implemented by UNDP Jordan and UNDP’s Insurance and Risk Finance Facility, is working at both the institutional and community levels to close the financial protection gap for hundreds of thousands of people working in Jordan’s agriculture sector. These are the people who would otherwise avoid conventional insurance products due to high premiums and religious concerns. Currently, in Jordan, there are 24 active regular insurance companies, and only two carry out Takaful insurance. 

To this end, UNDP brought together the Ministry of Agriculture, the Central Bank of Jordan, the Jordan Insurance Federation and private insurance companies to support key amendments to the Takaful Law. These amendments have enabled the private Takaful insurance providers to provide insurance and have resulted in new frameworks established for the government to pay a portion of the premium for agricultural Takaful insurance. 

After being submitted and approved by the Legislative Bureau, the law was referred to the Parliamentary Agricultural Committee and has now been endorsed. With these revisions, Takaful insurance providers can reach smallholder farmers, providing them with financial protection while also boosting the resilience of Jordan’s agriculture sector.

To help create the right conditions for agricultural insurance to be used as a tool for managing risks, UNDP designed a campaign for farming communities. The campaign had a particular focus on women farmers because they are generally responsible for sowing and harvesting crops. For this reason, women farmers also bear the brunt of increasingly frequent and extreme weather conditions linked to climate change. The campaign included learning workshops and messaging over mainstream media highlighting the impacts of climate change and safeguarding farms and families by participating in and benefiting from programmes like agricultural Takaful insurance.

The initiative marked a significant shift in women's perspectives on insurance as a tool to protect their livelihoods, making them aware of their agency in making the decisions that could shape their future. 98% of the women who took part in the workshops reported learning new information about climate change and its effects on agriculture and food security, while 88% of them expressed interest in joining the Agricultural Takaful Fund when it is formally established.

This ongoing campaign is part of UNDP’s commitment to building the financial resilience of local communities in Jordan. Agricultural Takaful insurance is crucial for the resilience of small farmers, predominantly women farmers and producers, against agricultural production and market risks, particularly those driven by climate change.