- Published on Sunday, 09 February 2014 01:13
- Written by RONALD NDUNGI of EANA
- Hits: 1083
THE International Finance Corporation has signed a 3.9 million US dollar agreement that will offer insurance to closew to one million farmers in East African Community member states in the next two years.
IFC Regional Leader, Mr David Crush told journalists in Nairobi this week that the funds will bring a crop and livestock insurance solution that will enable farmers to cope with weather risks.
“In 2014, we will insure at least 500,000 small scale farmers in Kenya, Rwanda and Tanzania,” Crush said during the signing ceremony in Nairobi.
The grant will be issued by the Global Index Insurance Facility, a multi-donor trust fund financed by the European Union, Japan and the Netherlands and implemented by IFC and the World Bank. Last year, over 189,000 small scale farmers were insured in the region under the project.
He added that Tanzania is set to join the programme this year. “We have just concluded a feasibility study in Tanzania on crop insurance which analyzed the historical data on climate,” he said.
Mr Crush said that they will commence a study on the programme’s viability in Uganda in the next few months.
He said that index-based weather insurance can protect against the adverse effects of climate change as well as help strengthen food security in rural communities.
“This is an improvement from the traditional agricultural insurance that relies on farm monitoring of losses which are calculated through farm inspections,” the regional leader said.
He noted that farmers will pay a subsidized insurance premium in the initial phase. “Once the market is fully developed they will pay the prevailing market rates,” he said.
The IFC official said that the crop insurance industry has performed well in other regions of the world.
“So we know that it will become a viable business in the EAC, once a lot of farmers embrace the concept,” he said.
Mr Crush said that insured farmers will be able to buy high quality seeds and fertilizer instead of planting seeds from previous harvests. “This will catalyze a shift to a more commercially based farming that will yields profits,” he said.
He added that the EAC is an important region for his financial institution. “The private sector is the real engine of growth in the region,” he said.
Syngenta Foundation Executive Director, Mr Marco Ferroni said that the project dubbed Kilimo Salama is on track to reach operational sustainability by the end of 2016.
He said that traditionally, small holder farmers minimise inputs in order to reduce exposure to adverse weather conditions.
“As a result these farmers remain in a vicious cycle of low agricultural productivity and poverty,” Mr Ferroni said. He noted that insured farmers will cultivate 12 different crops including maize, soybeans, potatoes and beans.
He said that last year the programme compensated 8,000 Rwandan farmers, a total of 66,000 dollars as a result of a drought.
“While in Kenya, a total of 462,000 dollars was disbursed to 80,000 insured farmers in 2013,” he said. The executive director said that the programme will also be rolled out to other sub Saharan countries in the next few years.