Nelly Bassily | October 4, 2010
Insurance packages for small-scale farmers are new. The UAP Insurance Company in Kenya is offering pastoralists and small-scale farmers insurance against losses incurred in times of drought or excess rain. Accurate weather information is vital to the functioning of the scheme. The Kenyan insurance scheme relies on solar-powered meteorological equipment, and is monitored in collaboration with local farmers.
Farmers who bought insurance are now receiving payouts via their mobile phones. Reactions appear to be mixed, with some farmers happy to receive money, while others are disappointed and feel that the payouts are insufficient to cover their losses. As the scheme is new and farmers are still experiencing how it works, it is early to draw conclusions. Crop insurance is being promoted as one strategy for coping with climate change and the greater uncertainty in rainfed farming systems. Critics of the scheme may say farmers would be wiser to invest in improving their farming and marketing systems.
Here are some links to news stories from earlier this year when the scheme was launched:
A story from Kenya describing how the insurance scheme works: http://www.scidev.net/en/news/kenyan-farmers-get-micro-insurance.html
A news story on IPS from earlier this year about an insurance scheme for pastoralists: http://ipsnews.net/africa/nota.asp?idnews=50222
Many insurance experts see this type of microinsurance as a great opportunity, one which will contribute to food security. Here are some stories from the insurer’s point of view:
Farm Radio Weekly has already brought you stories on insurance for small-scale farmers in our “rip and read” format:
Because insurance for small-scale farmers, sometimes called microinsurance, is new, it would make a very informative and interesting topic for a radio show. You could enrich your show with opinions from farmers, including large-scale or commercial farmers who are more likely to have used similar insurance products. Try contacting insurance companies or financial advisers for comments. Agricultural experts may also bring another angle to the story.