Small scale farmers opt for crop failure insurance on seeds and inputs

A new insurance scheme for farmers, called ‘Kilimo Salama’, offering compensation for crop failure for the payment of an extra 5 per cent on the cost of seeds, fertilisers and inputs, has seen 11,000 farmers join up in its first 12 months, and 100 fully or partially compensated for crop failure caused by extreme drought or rain.

The micro insurance scheme which currently covers the grains like maize and wheat is an inititiatave by UAP Insurance, Sygenta East Africa, Safaricom, MEA Fertilisers and Kilimo Salama who facilitate it at the grassroots.

According to Veronica Njuguna of Kilimo Salama they first rolled out the micro insurance scheme in largely lowland regions as those have two harvesting seasons. So far in Kenya it’s in five regions of Embu, Busia, Nanyuki, Eldoret and Kisii though, Embu and Eldoret are classified as highlands.

The farmers in these regions are clustered in a 20km area covered by ‘Kilimo Salama’ weather stations that monitor the weather over a full season. The data collected is used to help compute compensation claims due to farmers, which can be partial or full. In these regions ‘Kilimo Salama’ has 27 weather stations.

Compensation can be monetary or by replacing farm inputs or seeds.

The five regions covered in the country have ‘Kilimo Salama’ branded stockists who sell seeds from Sygenta East Africa and farm inputs from MEA Fertilisers. When a farmer buys farming products affiliated to MEA or Sygenta, at ‘Kilimo Salama’ branded stockists, he is given an option to register for the micro insurance scheme.

Personal details are taken down plus the phone number from which the farmer receives a registration confirmation alert from ‘Kilimo Salama’ with a policy number. After registration, a farmer gets charged 5 percent extra on every product he or she buys. If a product costs Sh400 a farmer pays Sh420. The extra Sh20 acts as a premium that goes to UAP.

In the stockists’ outlets, farmers are also advised by trained stockists on the seeds suited for their climatic region.

According to Wairimu Muthike of UAP Insurance, farmers are entitled to total compensation if expected rains fail. The total compensation can include full financial refund for the seeds and inputs initially purchased or an equivalent packet of inputs.

It doesn’t include the earnings that would have been made from a productive crop..  

But in instances where rains expected to grow maize or wheat fail by half farmers in the region get 50 percent compensation on their input costs. The rest it’s assumed can be gotten from the harvests that can be salvaged. “There can’t be total crop failure, especially in maize,” adds Wairimu.

To reduce the likelihood of crop failure as a result of poor farming management, once farmers register for the insurance they get free farming advice, relevant to their region and for the particular season, via phone text messages.

The scheme doesn’t cover crop losses to pests, floods or low crops due to poor farm management.

However, in covering against poor weather, it’s open to farms of all sizes, including small acreage of land.

Kilimo Salama is currently performing feasibility studies to extend the scheme to other regions, including Machakos and Kapenguria.

Of the partners in the scheme, Sygenta provides seeds, MEA provides fertilizers and farming chemicals, and Safaricom provides the text platform for communication.

For more details and contacts on the micro insurance Kilimo Salama visit http://kilimosalama.wordpress.com

Written By James Karuga for African Laughter

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