Govt. mulls insurance cover for ASAL farmers
The Ministry of Agriculture is seeking to expand its crop insurance program to cover farmers in arid and semi arid areas (ASALs).
The move is part of a joint partnership with the International Fund for Agriculture Development (IFAD) aimed at compensating farmers affected by the vagaries of weather that cuts their production.
The ministry has called for consultative services from insurance firms to develop an insurance compensation model as well as products that will be applicable to farmers.
“The feasibility study is to analyze the relevance, needs, and demands of crop insurance and subsequently provide recommendations on possible appropriate crop insurance products for inclusion in the program’s e-voucher package for small holder farmers,” the Ministry of Agriculture said in a notice in the dailies.
Insurance firms have been offering crop insurance with minimal uptake with the government now keen to create a supportive enabling environment.
The Ministry of Agriculture’s program will cover Embu, Tharaka Nithi, Kitui, Machakos, Makueni, Taita Taveta, Kwale and Kilifi counties.
The program will cover crops such as maize, sorghum and millet.
As it’s currently structured, farmers are subsidised by the government for half of the premiums for up to five acres of land.
The claims are based on the yield in the particular area and any loss of yield below 80 per cent is paid as compensation.
The government was forced to go into an emergency off take program for livestock earlier this year following prolonged drought.
The ministry of agriculture argues the insurance industry is a key financial sector player and can contribute to a large part the realization and success of national development goals by addressing risk.
Insurance penetration in Kenya stands at 2.9 percent.
A study conducted by the World Bank and the ministry through the National Agricultural Insurance Program found that farmers do not appreciate the need for agriculture insurance because existing informal systems of managing risks such as income diversification, multi-cropping and scaling down on production in seasons perceived to be unfavorable for farming seem to work.
According to Ministry of Agriculture officials, the challenge has been that farmers already exposed to agriculture insurance have failed to experience the proposition of real value of cover especially where no claim has been made in successive seasons.
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