NAIROBI, Kenya, Jul 25 – Over 500 barley and sorghum farmers across Kenya will benefit from insurance cover and financing as part of a partnership with CIC Insurance Group, Co-operative Bank of Kenya and East Africa Maltings Ltd (EAML).
Under the partnership, Co-operative Bank will finance inputs for farmers contracted by EAML to grow barley and sorghum, while CIC Insurance will insure the crop at the value of loaned inputs per acre.
Speaking during the program launch, CIC Insurance Group General Manager Kenneth Kimani said under the scheme, crop worth over Sh1 billion has been covered against yield losses such as drought, fire and excess rains among others.
“The farmer is compensated by the insurer if eventually he gets less than the set yield, which is about 6.5 bags per acre, as a result of the weather perils insured. This ensures that the farmer will always go back to production the following season.”
The scheme that requires farmers to grow a minimum of 14 hectares of barley currently covers over 25,000 hectares of crop primarily in Mau Narok.
Farmers will be required to plant within a stipulated planting window, depending on their location, to be eligible for coverage and be subject to physical crop inspections and farm visits.
“Not every area has the same planting period. These periods give the earliest and latest planting dates for a given region to achieve good yields. CIC agronomists will do three inspections during the life of the crop to ascertain germination, track growth and estimate expected yields,” Mr. Kimani said.
The premium rates will have farmers pay 5.5 percent of the value of their crop for insurance coverage.
“For the EAML project we are charging farmers 5.5 percent of the value of the crop, which translates to Sh880 per acre. This is about a third of the value of one bag of barley. So the farmer is using a third of a bag of barley to insure 6.5 bags per acre,” said CIC Insurance Group Agronomist Michael Waigwa.
He added that rates will fluctuate depending on the loss experience of the crop citing areas such as Narok, where some farmers have reported total losses, after the drought.
With unfavourable weather patterns in recent years, Mr Kimani said, more farmers are considering insuring their crop as a risk management option.
“Drought was declared a national disaster both in 2005, 2009 and now in 2011. As Kenyans become more enlightened on insurance and continue to experience risks posed by changes in weather, farmers are increasingly taking up agriculture insurance.”
CIC Insurance is already a major insurer of maize and wheat mainly in Narok, Eldoret, Nakuru and Timau.