KENYA: Farmers access insurance for seeds and fertilizer

Record ID: 361843

  • Title: KENYA: Farmers access insurance for seeds and fertilizer
  • Date: 9th March 2010
  • Summary: ELDORET, KENYA (RECENT) (REUTERS) VARIOUS OF PEOPLE PACKING MAIZE INTO TRUCKS (SOUNDBITE) (Kiswahili) MARK KIPROTICH KORIR, FARMER, SAYING: "This is not even half but a quarter of what we harvested last year. The problem is that the rain was delayed. There was no rain until after the harvest." (SOUNDBITE) (Kiswahili) ABRAHAM KOMEN, FARMER, SAYING: "This what we've been
  • Embargoed: 24th March 2010 12:00
  • Keywords:
  • Location: Kenya
  • Country: Kenya
  • Topics: Industry
  • Reuters ID: LVA14P38CZMJVYUC0S4HKJ3VHD37
  • Story Text: Farmers in Kenya's Rift Valley region can now get affordable insurance for the seeds and fertilizers they purchase through their mobile phones.
    Last year, after a few weeks of rains in April, the Rift Valley dried up and the crops stalled. Kenyan farmers experienced the worst drought in decades. Failed harvests left nearly three million people relying on relief food, and almost a third of the country vulnerable, according to the International Red Cross.
    "This is not even half but a quarter of what we harvested last year. The problem is that the rain was delayed. There was no rain until after the harvest," said Mark Kiprotich Korir, overlooking his maize crop being packed for transport to Nairobi.
    "This is what we've been waiting for. There will be insurance for the things that will be planted. At least the farmers will agree because they have suffered for many years," said Abraham Komen, who only harvested 80 bags of maize last year, rather than his usual 200 bags.
    Through the new system, called "Kilimo Salama", which in Swahili means "Safe Farming", farmers insure their seeds, fertilizers and chemicals at local agricultural supplies shops for about 5 percent of the cost of the items. On purchase, the dealers use a camera phone to scan a barcode that automatically registers the items with Insurance company, UAP over Kenya's leading mobile phone service provider Safaricom's data network system.
    Confirmation of the policy is then sent to the farmer on his mobile phone via a text message.
    "They have to buy the Kilimo Salama product because it will make sure at the end of the year, if anything goes wrong, like when the drought will be there, then they will be compensated the money they have used in the process of farming," said Lillian Leley, the shop assistant at Maraba Investments Ltd, who began selling the insurance plans at the beginning of March, 2010.
    The local climate is monitored by thirty solar-powered weather stations, which transmit rainfall, sun radiation, temperature and wind data every 15 minutes over the mobile data network. In the case of drought or excessive rains, registered farmers automatically receive insurance payouts from UAP for the costs of the farm inputs through Safaricom's M-Pesa mobile money transfer service.
    However, farmers are not awarded insurance for the value of their failed crops.
    "One thing about index insurance is that you can be able to come up with a model for almost all the crops that you are growing in this country - we are talking about coffee and in every crop we've got different challenges, which can be measured by the weather station, by the way. You have just to correlate which weather parameter you are looking for," said Isaac Magina, UAP Insurance's Agriculture Underwriter.
    This new crop insurance is currently limited to the variability in precipitation for wheat and maize crops specifically. It doesn't address the issues of pests or disease, or cover a number of other starch crops and vegetables that Kenyan farmers rely on.
    Another issue is that the insurance is only available on the agricultural inputs of Syngenta AG, a Swiss agrobusiness company, and their partners. The insurance platform is currently limited to areas near weather stations in the Rift Valley. But the project would like to expand to 500 stations across the country with hopes of reaching as many as 50,000 farmers by 2012.
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