New insurance for Kenya farmers

October 14, 2009
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, NAIROBI, Kenya, Oct 14 – Kenya’s small scale farmers will now be able to take insurance against the effects of drought and excessive rain.

This follows a successful pilot phase for the new Weather Indexed Crop Insurance developed by UAP in conjunction with Syngenta Foundation for Sustainable Agriculture.

Speaking during the payout exercise to 152 farmers in Nanyuki, UAP Head of Marketing and Distribution Joseph Kamiri said that the company had developed the product in response to a great need identified while developing agriculture insurance products for the Kenyan market in conjunction with the Syngenta Foundation.

“We realised that many small scale farmers had more failed crop seasons than successful ones and brought them this product to develop a sustainable way of crop farming,” he said.

Mr Kamiri added that sustainable crop farming systems especially for small holder farmers was key to ensuring food security for Kenya and that UAP was keen to contribute. This innovative product, which has been successfully tested, saw UAP hand over compensation payouts in form of inputs to more than two hundred farmers who were affected by the prolonged drought situation in Laikipia East district.

“The payouts today clearly demonstrate that this is a product that delivers on its promise,” he noted.

The insurance coordinator of Syngenta Foundation for Sustainable Agriculture in Kenya, Rose Goslinga said that the foundation was a demonstration of how the private sector could work together to promote sustainable agriculture.

The compensation followed 18 months work in developing an index-based insurance scheme specifically targeted at smallholder farmers.

Under the novel system, farmers register their purchases by sending an SMS to a phone number provided by UAP. The weather stations then monitor the weather and inform the insurance company of impending crop failure and subsequent compensation. Each farmer is then informed via SMS about the payouts.

Costs are kept down through the use of automated weather stations which avoid the need for expensive field visits to farms to ascertain risk and loss.   This makes the insurance feasible for both the farmer and the insurance company.

Ms Goslinga noted that the success of the pilot in Nanyuki had generated increased interest with more farmers expressing satisfaction in the program. “We intend to roll it out to other parts of Kenya next year,” she said adding that the product was crucial as it gave farmers confidence to invest in good seeds and other inputs.

Ms Goslinga explained that this use of technology eliminated the need for field visits by insurance and agricultural staff as well as the processes of applying for policies and lodging claims.

“Traditionally, smallholder farmers have been totally dependent on the vagaries of weather,” explained Ms Goslinga.  “In times of drought they lost their crops and their investment in seed and fertiliser.  To make matters worse, farmers then had to pay for a second lot of seed to enable them to replant. But because they had not obtained a crop, they had little money, if any, to repurchase the seed.”

“As part of our Foundation’s work in sustainable farming among smallholders, we wanted to provide farmers with some protection while encouraging them to adopt good practices such as conservation agriculture and help contribute to food security for both themselves and the country,” she added.

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