Why take risks when there are cheaper insurance policies to protect farmers?

Residents of Endemu village, Borabu in Nyamira County look at the carcass of eight months expectant grade cow killed by unknown people the night of June 28, 2015. (Photo: Denish Ochieng/ Standard)

NAIROBI: Insurance cover is meant to cushion policy holders from losses and inconveniences that are likely to occur following a financial or personal loss.

The insurance industry is hundreds of years old, with a cognate form of the industry tracing back to the second millennia among the Babylonian traders.

In agriculture, the insurance industry serves as the much needed line of defence against losses that are likely to be incurred from disasters such as floods, drought, pests and disease outbreaks. In Kenya though insurance penetration, more so in agriculture, is wanting, with less than one per cent of farmers covered despite the volatile nature of the industry.

There are many reasons why farmers are wary of insurance policies. Research shows that farmers do not believe insurance companies will ever compensate them in case of loss.

Others fear that the insurers are likely to put them through the daunting task of proving they actually suffered loss or compensate them with meagre amounts. Many farmers  say these fears are valid.

But new, innovative farmer-friendly policies have been developed over time. Farmers now have the hopes of insurance policies that meet their needs. By integrating innovative technologies and partnerships into the insurance industry, farmers now have access to policies that are just as friendly as they come.

“The policies are now designed to be easier and more flexible to the farmers,” advices Linus Kimtai, a policy officer at APA insurance company, one of the leading providers of agricultural insurance policies.

“It has taken a joint initiative between the insurers and the government, agricultural research organisations as well as financial companies to almost completely remodel the face of the insurance policies to a more flexible product that farmers can now enjoy,” Mr Kimtai adds.

NEW TECHNOLOGY

One of the great revolutions insurers have added to the policies is  technologies that make both the determination and settlement of claims fast and convenient.

The livestock insurance industry, for example, has incorporated the use of NASA satellites to provide the much-needed data that is used to determine the level of vulnerability in regard to pastures. The satellites are used to map the pasture density and trigger an alert whenever the pastures levels drop below the expected level.

But it is the crop insurance policies that have probably pushed technological innovation to a bold new frontier. Some of the traditional meteorological stations have now been converted into modern automated stations with the capacity to send out an array of data on prevailing weather conditions such as rainfall, sunlight, temperature and speed of wind.

This data is then used to trigger a response whenever the prevailing weather conditions are below the expected levels, as well as to determine the severity of the loss to farmers.

The data, which is also shared with the insured farmers, is also very important to them. The farmers can use it to avert any looming danger such as an expected upsurge of pests or diseases such as blight or aflatoxin. Farmers can also use the prevailing weather to optimise their production whenever the conditions are favourable.

The crop insurance business has also extensively employed the use of mobile technology, right from drawing up of the policy paper, to the settling of the claims.

Farmers no longer need to travel all the way to the big cities to get insurance cover.

CHEAPER COVER

Mobile phones, already programmed with GPRS, are provided to appointed agents who are able to process and submit claims for farmers taking up insurance cover on inputs such seeds and fertilisers.

Mobile phones are also used to distribute information regarding the processing of claims, as well as finally paying out their dues to policy holders, who can withdraw it at their own convenience.

The innovative insurance packages now come with an added touch of flexibility. Farmers are now afforded the option to try out a given insurance policy as they familiarise themselves with insurance procedures.

In crops, a farmer can opt to start with the cheaper option of insuring  input costs, and later move to the more comprehensive cover on expected yields.

The insurance index of the goats and sheep, commonly referred as “shoats”, is also lower than that of the larger animals like cows or camels. Farmers have the option of starting with the cheaper cover, and later on moving to insuring other animals with a higher value.

All this comes with an additional benefit to the Muslim community, as the cover is designed in a way to offer the benefits of an insurance cover, and at the same time preserve the all important religious belief through the index-based livestock Takaful scheme.

No matter the type of farmer you are, whether large scale or small scale, modern insurance policies have something growing for you.

A walk to your preferred insurance provider may be the one step you need to stop the constant worries of possible loss or damage of your crop or livestock.

Moreover, there are insurance policies that absorb the risk of your produce in time of transit or storage; especially if you intend to store your produce over a long period of time. So why risk bearing all those losses alone, while there exists an optional line of defence?

The writer is a science-communication expert, consultant, and university lecturer