Weather-based crop insurance attracts a crowd: drought protection for Africa’s small farmers

Citation

(2011), "Weather-based crop insurance attracts a crowd: drought protection for Africa’s small farmers", Disaster Prevention and Management, Vol. 20 No. 1. https://doi.org/10.1108/dpm.2011.07320aab.004

Weather-based crop insurance attracts a crowd: drought protection for Africa’s small farmers

Article Type: News items From: Disaster Prevention and Management, Volume 20, Issue 1

A crop insurance plan for Kenyan farmers has attracted nearly 1,000 participants a month during the first year of its existence.

Kilimo Salama (Swahili for “safe agriculture”) has brought in 11,000 subscribers to its weather-based insurance plan during it first year of operation.

The Kenya operation (kilimosalama.wordpress.com), funded by a partnership of Syngenta Foundation for Sustainable Agriculture, UAP Insurance, and Safaricom, provides crop coverage for weather-related crop loss. Farmers pay 5 percent extra on the seed and other products they, then they are reimbursed up to 50 percent of their input costs. It is assumed that the rest can be recovered from salvage harvests of the crop.

The insurance plan paid out its first claims at the end of September when 100 farmers received payments because of low rainfall in Embu in central Kenya.

Kilimo Salama has installed 27 solar-powered weather stations in its rural Kenya regions to monitor rainfall in the area. Farmers are not covered for losses from pests, floods, or poor management. The group provides training by agricultural experts on best practices for each climatic region.

There are many micro-insurance products, not just for agriculture. In South Africa, for instance, most people have funeral insurance. But agricultural micro-insurance schemes have been expanding in Africa and elsewhere around the globe over the past few years (Natural Hazards Observer, May 2009). According to an International Labor Organization Micro-insurance Innovation Facility report (www.ilo.org/public/english/employment/mifacility/publ/brnotes.htm), southern and eastern Africa are leading the way, with agricultural insurance programs in Malawi, Kenya, South Africa, Namibia, Ethiopia, and Zimbabwe. In Asia, India is the only nation in the world with a commercial insurer handling the programs. ICICI-Lombard sells 40,000 to 50,000 policies there annually.

Syngenta says that while the early tests have been successful, agricultural insurance is still in the laboratory stage and is not ready for mass marketing. “Firstly,” the foundation says in a fact sheet on the program, “insurance products need to be affordable for farmers, without reverting to subsidies. Secondly, distribution channels relevant to smallholder farmers need to be identified and developed. Thirdly, investment in renovating automated weather stations that can monitor the local weather patterns and the related insurance contracts is needed.”