More farmers seek refuge in insurance as long rains fail

A massive drop in farm yields due to unpredictable weather patterns is forcing many farmers in the North Rift to turn to crop insurance. Mr Thomas Koech, a large scale farmer in Chereng’any, is one of them.

For the past 30 years, Koech has cultivated maize, wheat and seed maize on his 200-acre farm. Last year, the 52-year-old was contracted by the Kenya Seed Company to supply seed maize on 95 acres. As fate would have it, the July long rains failed.

“Farming is always risky,” he said. “A farmer can do everything right but is let down by natural calamities,” he says.

Luckily, UAP Kenya had insured Koech on inputs. “I used about Sh3 million on fertiliser, seed, labour and other costs,” said Mr Koech.

He was one of the 91 farmers covered by the underwriter under its weather-based insurance product, KilimoSalama. The farmers received a total of Sh15 million under the policy supported by Syngenta Foundation for Sustainable Agriculture.

Koech only harvested 1,250kg of maize per acre against the average normal yield of 2,000kg. He received Sh500,000 in compensation.

UAP’s head of agriculture insurance, Mr Isaac Magina, says the sector is vulnerable to climatic conditions.

“The product was introduced to motivate farmers to return to their farms after a devastating loss,” said UAP’s operations manager, Mr Michael Oduor.

In 2008, UAP started insuring livestock and wheat farmers, targeting large scale farmers only. Three years later, it had more than 150,000 farmers under its fold, 75 per cent of whom are in small scale business. Mr Magina expects the number to increase this year.

Sh340 million

Already KilimoSalama has secured Sh340 million from International Finance Corporation to increase its reach.

Not all farmers, though, appreciate crop assurers. Some view them as ‘leeches’ out to exploit them.

“The reality is that farmers do not trust insurance companies,” says Mr Hugo Wood, who owns a 9,000-acre wheat farm in Narok.
Mr Wood says farmers think about machinery and bottom-lines, not premiums. He was approached with a Sh12 million cover by two insurers, which he found ‘not worthy’.

“I would love to insure the rest of my crops but I cannot afford it,” adds MrKoech.

Mr Magina says the premiums are high because the sector is still young.

“Claims made usually dent available reserves. As more farmers come on board the risks will be spread and the premiums will fall,” he says.