1. Uganda: Microinsurance schemes to help farmers deal with unforeseen circumstances (written by Joshua Kyalimpa, for Farm Radio Weekly, in Kampala, Uganda)

| February 23, 2009

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On his four-acre garden in Naminya village, about 50 kilometres east of Kampala, Lawrence Lubanga is preparing his fields for a new planting season.

He is set to resume growing vegetables such as cabbages, onions and tomatoes. Although these fetch more money than other crops, the rains of early 2000 had forced him to stop growing them.

During those rains, Lubanga’s garden was totally destroyed. But, with vegetables in high demand, he has teamed up with the Naminya Vegetable Farmers’ Association to grow the crops again.

Halima Kizza is another member of the Vegetable Farmers’ Association. She says that the group is motivated by the booming market in Kampala and southern Sudan, and is confident that they will receive a loan for their venture.

Like Lubanga, Kizza and other farmers had given up on crops that are vulnerable to unpredictable weather conditions. Although their gardens are adjacent to the Nile River, the farmers rely on rainwater because they cannot afford to put an irrigation project in place.
“I grow tomatoes, cabbages, onions — all those require water. But because of the water problem, when we grow them in the rainy season they are affected by heavy rains,” says Kizza.

Farmers in the Naminya Vegetable Farmers’ Association, like others across Uganda, depend on their own small savings to invest in the garden because local financial institutions will not lend to farmers. They find it too risky.

But that is about to change! Uganda is about to introduce a new crop insurance scheme. Richard Leftley is the Chief Executive Officer of Microensure, the company behind the plan for crop insurance. The company works with the Meteorological Centre to access rainfall and environmental data.

John Magezi is the Commissioner for Meteorology, a government body that forecasts weather conditions in the country and advises farmers on when to plant. He tells Farm Radio Weekly that weather-indexed crop insurance, in which insurance companies and farmers are advised on likely weather patterns by an authority before they buy or sell insurance or secure a loan, has been used in countries such as Norway to protect both the farmer and the lender.

He explains that, with weather-indexed insurance, a farmer insures his crops for a season and can secure a bank loan guaranteed by the insurance company.

In the Microensure scheme, farmers will pay a premium of 2,000 Ugandan shillings per season (about 1 US dollar or 0,80 Euros). Frank Tumwebaze is the president of the Uganda Farmers Federation. He says that, through the new insurance scheme, people who operate rural credit schemes will get advice from weather experts. This advice will help them assess the risks associated with a loan and advise farmers accordingly.

Uganda has adopted a strategy for fighting household poverty by advising farmers on techniques to improve yields. The crop insurance scheme will help rural farmers who could not otherwise access loans because lenders considered farming a risky business; Ugandan farmers who experience unpredictable weather and natural calamities often find it hard to repay their loans.

The scheme is being rolled out under the theme, “Ensuring a safer future.” Flora Kaheru is
Microensure’s country manager. She says that their first task has been to help farmers, like those in the Naminya Vegetable Farmers’ Association, appreciate the need for insurance services to cover their farming activities.

Micoensure is working with non-governmental organizations countrywide to expand their insurance products for farmers who own lands that are about an acre in size. The Naminya Vegetable Farmers’ Association was introduced to the scheme through another organization, the Uganda Organic Farmers’ Association, one of Microensure’s partners in rolling out the scheme to farmers.

Lawrence Lubanga says that the money the farmers will pay for insurance coverage will be affordable for anyone who follows a good business plan. He hopes that if the scheme expands to other farmers, poverty will become a word of the past.
Click here to see the notes to broadcasters on microinsurance