A smallholder farmers insurance cover has been launched by local Insurance companies who have partnered with the Kenyan government for the purposes of providing protection against poor maize yields.
The government partnered with seven local insurers whereby they launched two products, aimed at easing the financial strain that comes about as a result of natural disasters and poor harvests thus depleting farmers’ resources. The World Bank applauded this partnership, stating that for the first time, local farmers will benefit greatly.
During the launch, Jubilee Insurance stated that CIC, Heritage, APA, Kenya Orient and UAP will provide The Area Yield Insurance that will be compensating farmers against losses from adverse climatic conditions, diseases and damage by pests.
Jubilee has already started providing the product in some parts of the country including Nakuru, Embu and Bungoma counties. The government on the other hand promised to provide a 50 per cent subsidy on insurance premiums for every five-acre piece of land per farmer.
Farmers to benefit for the cover will be those who will be reporting to have gotten yields that will be below 80 per cent of whatever was expected to have been harvested during the policy period. Farmers in Embu will be required to give premiums of between Sh. 280-700, Bungoma Sh. 350-500 and Nakuru Sh. 500-1,500 for every acre piece of land.
Agriculture contributes up to 24 per cent of the country’s economy, therefore, such covers will be of great importance to farmers and he country at large. The program has the potential of impacting the economy of the country positively as it will increase production as well as producer incomes.
The products effectiveness will depend on the farmers’ payment of their shares of premiums and will also be based on their harvest history from the identified farm. Since most farmers in the country lie within the small scale farming group, this cover will enable them to adopt improved production processes which will I turn help them break the poverty cycle of low investments and low returns.
Article by Vera Shawiza.