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Micro-insurance for Kenya's farmers

Farmers with as little as one acre of land will be able to insure their inputs (Jeff Haskins)
Farmers with as little as one acre of land will be able to insure their inputs
Jeff Haskins

Using solar-powered weather stations and a mobile phone payment system, a 'pay as you plant' insurance scheme will enable Kenyan farmers with as little as one acre of land to protect their investments in seeds, fertilisers and other inputs. Kilimo Salama, or 'safe farming' in Swahili, is targeting farmers in Central, Rift Valley and Western Provinces. "Extreme weather, particularly drought, traps many African farmers in poverty because it robs them of the means to recover," explains Marco Ferroni, executive director of the Syngenta Foundation.

The insurance policy is registered with UAP Insurance when participating agro-dealers scan a special barcode using a camera phone. The farmer is then sent an SMS confirming the policy. Farmers pay an extra five per cent to insure their seeds, fertilisers or other inputs, while MEA Fertilisers and Syngenta East Africa match this investment to cover the ten per cent premium. By transmitting information about local weather conditions and rainfall, solar-powered weather stations enable experts to determine if crops have become unviable. If this is the case, payouts are made to all farmers registered with that station using Safaricom's M-PESA mobile money transfer service.

"By using the weather stations to verify local weather conditions, we are avoiding claims procedures that have created mistrust and led people to avoid insurance," says James Wambugu, executive director of UAP. "As such, this strategy has the potential to make agricultural micro-insurance affordable and attractive for smallholder farmers and economically viable for insurance companies in developing countries that had previously written off the agricultural sector." The scheme expects to reach 5,000 farmers in 2010 before expanding into the main Kenyan farming regions by 2012. Kilimo Salama is a partnership between the Syngenta Foundation for Sustainable Agriculture, UAP Insurance and Safaricom.

Date published: May 2010

 

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The New Agriculturist is a WRENmedia production.

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