Insurance to Cover Farmers from Bad Weather Losses

Small holder farmers in Kenya and Rwanda will benefit from a new insurance programme for the next three years sponsored by the World Bank Group atm International Finance Corporate ion (IFC).

The insurance programme will offer to cover more than 35 000 farmers and 5 000 livestock keepers from the two countries. This will include cover from financial losses occasioned by drought, floods and other natural disasters.

The IFC has partnered with several organisations including the Syngenta Foundation for Sustainable Agriculture (SFSA), Kenya’s UAP Insurance Company and the International Livestock Research Institute. Access to insurance services for farmers has been made more accessible in order to cushion them from heavy losses that occur due to poor harvests occasioned by bad weather.

The IFC will disburse up to $4.1 million (Ksh.329 million) to finance this project. The Grant will facilitate the insurance of about 20 000 farmers in Kenya, 15 000 farmers in Rwanda and 5000 livestock keepers in semi arid northern Kenya, where thousands of animals die every time drought occurs.

The grants will also go towards capacity building and provision of advisory services to farmers. The insurance cover is expected to spur increased production and food security.

The pilot phase of a similar insurance programme undertaken by the SFSA, UAP Insurance and Kenya’s leading mobile operator Safaricom Ltd., dubbed ‘Kilimo Salama’ which is Swahili for “safe farming”, has provided cover to over 11 000 farmers in parts of Kenya.

Farmers pay an extra five percent during the purchase of seeds as an insurance premium. They do not have to lodge a complaint, as payments of the claims are automatically triggered and made to the farmers through mobile money transfer M-Pesa. This is done once weather stations positioned across the country record low or excess rainfall amounts.

The programmes aim at encouraging farmers to use improved seeds and nutrition for their crops so as to increase crop production and boost food security.