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Agriculture insurance cushions farmers from losses, boosts food security

Heads of cabbage in a farm at Cheptongei, Marakwet West in Elgeyo Marakwet County. [Christopher Kipsang, Standard]

Since the onset of the Agrarian Revolution, agriculture has always depended on weather patterns. But climate change is making farming cycles more unpredictable globally.

In Kenya, the Kenya Climate Smart Agriculture Strategy 2017-2026 indicates that 98 per cent of the country’s agricultural systems are rain-fed and highly susceptible to climate change and variability. This susceptibility is likely to jeopardise the attainment of the sector's contribution to the national economy. The frequency and severity of crop failure and livestock mortality have increased over the years.

Currently, the country is going through a dragged-out drought period that has seen more than 3.5 million people facing extreme hunger, livestock deaths and the destruction of crops.

The need for both livestock and crop insurance to mitigate devastating weather-related risks can therefore not be gainsaid.  

Smallholder farmers, who depend on rain-fed agriculture and use low-technology farming methods, are particularly vulnerable to droughts and floods, given that less than 1 per cent are currently protected by some form of insurance.

Despite high levels of government and partner subsidy for agriculture (livestock and crop) insurance premiums, their access and acceptability have been sluggish and this is attributed to low awareness and knowledge of agricultural insurance, lack of trust and poor understanding of insurance by rural farmers.

Agricultural insurance aims to protect farmers from the risks they incur while also helping them to boost productivity and contribute to the population’s food security.

Increased climate variability can also adversely affect the economy by reducing the need for agricultural investment, which in turn leads to poorer agricultural production, higher levels of food insecurity, and a decreased resilience of households that depend on rain-fed agriculture.

It is critical to address challenges including inadequate understanding of agricultural insurance products, gender disparity, and cost, among others, in order to increase the supply and uptake agricultural and climate risk insurance.

Agricultural insurance can assist farmers to continuing cultivating or herding, maintaining their income levels even if the produce is lost by covering losses from unfavourable weather conditions.

Additionally, agricultural insurance can assist farmers to access credit for inputs, do business with other value chain actors, including off-takers. Insurance settlements can also be used to buy food, pay bills, make repairs, and reinvest for faster production recovery.

Many of the most severe threats are climate-related. They are compounded by disease and pest outbreaks.

According to a brief based on ‘Climate Change and Food Security in Kenya- 2015’ by Environment for Development Initiative, adverse climate change is likely to increase food insecurity in Kenya, with the greatest effect on maize insecurity, which is predicted to increase by 8.56 per cent to 21 per cent by the year 2100.

Thus, agricultural insurance serves as a reliable risk mitigation instrument for coping with climate-related risks.

According to the Kenya Vision 2030, under the Agriculture Policy, Legal and Institutional Reforms, the government stipulates to develop insurance policies that will cushion producers against the weather fluctuations.

Farmers need to take up opportunities for agricultural insurance provided by the government or other organisations. Besides that, the government should also increase its scope and provide awareness to farmers to understand the importance of averting risks.

Farmers that are able to better manage their risks are better able to contribute to a country’s food security.