How farmers can reap from proposed insurance scheme

Maize plantation in Njoro, Nakuru County. If managed well, the insurance scheme could encourage banks and non-banking financial institutions to increase loans to the sector. [PHOTO:BONIFACE THUKU/STANDARD]

Nairobi; Kenya: Agriculture Cabinet Secretary Felix Koskei, deserves commendation for his efforts to improve the country’s agricultural output. His recent announcement that farmers will benefit from an insurance scheme for their crops and animals is particularly welcome because it will encourage banks and non-banking financial institutions to increase loans to the sector.

Analysts are unanimous that the scheme, which is set to begin early next year before the onset of the long rains, will only achieve its intended purpose if its administration is transferred to the private sector. At best, the government should play the role of re-insuring the risk while encouraging insurance companies to come up with attractive packages to suit all types and classes of farmers including those who currently may not be aware they need insurance.

This unanimity is borne out of experiences in the not too distant past—in the 1980s—when the government backed and operated Guaranteed Minimum Returns (better known then as GMRs) scheme covering wheat and maize production, mainly in the former White Highlands, was shamelessly abused by well-connected farmers in cahoots with civil servants.

It is sad, but true, that the incidences of corruption have grown in leaps and bounds since then and a government scheme run by the civil service would do little to increase food production. Of course, it would turn the leaders responsible for its administration into overnight millionaires in the same way it did their predecessors. Needless to say, the ordinary taxpayer would be left holding the bag. The government should, therefore, consider taking several pro-active steps to ensure the country gets value for money before launching the insurance scheme. One of those steps would be to employ, literally, thousands of additional extension officers and deploy them at the grassroots.

Ideally, the county governments should be responsible for employment, deployment and supervision of these officers. But the shenanigans observed in most of the counties where there is open bias and discrimination in their employment practices raises questions on their ability and willingness to crack the whip to ensure that the farmers get value for money.

millennium goals

At the very least, the officers would be required to carry out mass education programmes to ensure that farmers have the relevant information while making decisions on the crops to plant and the in-puts to use. That means that soil testing would be no longer an option.
It also means that the government should declare open warfare on dealers of uncertified seeds, fake chemicals and fertilisers all of which cost farmers millions of shillings in money spent in buying them and billions of shillings in lost earnings when seeds fail to germinate as expected or the crops are devastated by diseases that should have been prevented by use of proper agricultural chemicals.

It is unconscionable that these practices have been allowed to go on for years with little or nothing being done to deter the perpetrators.
Making sure farmers get the right seeds, fertilisers and agricultural chemicals at the right time, and in the right amounts, would lead to a two-or three-fold increase in harvests which would, in turn, improve their living standards. This single development would have a ripple effect on the entire economy. The country would also reach its millennium goals with ease.

The entire country would benefit greatly if the government adopts some or all of these measures before distributing next season’s fertilisers because there is reason to believe much of it goes to waste. Farmers who fail to harvest at least 20 bags of maize per acre, for example, even after they use the recommended fertilisers need to have the entire process audited to find out just what went wrong. The same process should be followed for potato farmers who harvest less than 100 bags an acre after using the recommended inputs.

The cadre of extension officers employed should also include those trained in water harvesting technology to ensure that those farmers who do not usually get adequate rainfall produce enough for themselves and for sale. This technology need be neither complicated nor expensive. And in any event, its cost could easily be factored into the cost of production that could be covered by small loans disbursed by financial institutions with the government backing. The export market should prove to be particularly attractive.

Comesa treaty

The farmers who are already in it should be assisted to increase their yields while those outside should be encouraged to get into the sector. This is particularly important in regions that currently grow sugar-cane whose earnings are under intense pressure. It is evident that these pressures will mount to intolerable levels once the protection the sector is enjoying under the Comesa treaty ends in a short while.

The areas currently growing maize should also take a second look and, perhaps, find an alternative crop given the challenge posed by disease. These farmers’ earnings are also set to come under increased pressure when the various irrigation projects are completed because the production costs in these schemes will be considerably lower than in existing maize farms. The irrigation schemes will also produce two harvests a year unlike the rain-fed farms in North Rift which usually have one crop a year.

Understandably, the export crops should be produced in a manner consistent with the importing countries’ standards. A situation whereby importers reject produce because it has violated their sanitary and health standards should not be allowed to continue much longer. Any producers and exporters who fail to meet the required standards should be banned from the export market until they can prove they have learned their lesson.