News / Africa

Insurance Initiative Could Protect Farmers Against Drought in Kenya

With the news of a coming drought looming over east Africa, small farmers walk a thin line between survival and ruin. But a new micro-insurance program could provide some measure of stability for residents in country's driest areas

A herder in Kenya tends to his cattle, Aug 2010
A herder in Kenya tends to his cattle, Aug 2010

Multimedia

Michael Onyiego

In Kenya, the specter of drought is never far from the minds of the millions who make their living on the farm.  

Agriculture is Kenya's most important product.  The industry employs nearly three quarters of the country's workers and accounts for almost one fifth of the nation's gross domestic product.

Drought threatens the livelihoods of tens of millions in Kenya, but those most at risk are the millions who farm simply to survive.  For those farmers, drought is both an economic risk and a life threatening event.  

Many subsistence farmers in Kenya invest their life savings into each harvest, and a single season of light rain can set a family back for years.  

In 2007, unusually low rainfall triggered a food shortage, sending food prices up and prompting calls for price controls.  The effects of that drought continued through late 2009, when unusually heavy rains provided a rare surplus for the country.  

In east Africa, serious drought is expected about once per decade.  But recent reports of a La Nina weather system in the Pacific have many predicting yet another season of insufficient rain.  

To protect against such uncertainty, small farmers often plant different seed varieties to guarantee at least some returns on their investment.  Planting different types of drought resistance crops can help cover risk, but lead to reduced yields and keep farmers living from season to season.  

Harvest insurance can protect against crop failures, but such services are expensive and typically unavailable to farmers.  Insurance premiums can reach thousands of dollars, while many small farmers invest less than $100 in each season's crop.  Small farmers often work in remote areas, making site visits by insurance companies difficult and expensive.

But through a new partnership between UAP Insurance, telecommunications firm Safaricom and Swedish non-profit Syngenta, Kenyan farmers can buy insurance on seed and fertilizer to protect against potential losses.

The product, called Kilimo Salama - which means "safe agriculture" in Swahili - harnesses mobile technology and new agricultural technology to provide insurance on a smaller scale.

Instead of insurance inspectors, Kilimo Salama has installed stations across the country that measure weather patterns and predict how harvests will be affected.  These unmanned stations wirelessly transmit data to a central database that is used to calculate losses and distribute payments to farmers.

According to Sygenta spokesperson Rose Goslinga this method, known as weather indexing, provides an efficient and cost effective way of calculating risk on small farms.

"That weather station measures what goes on, on the farmers' fields and is essentially a representation of the insurance.  So you do not have to send anybody to go and check what happens on the farm," she said. "This means you reduce your transaction costs.  Instead of having to go and visit, you now can see 100 farmers, who all maybe have one acre and measure what goes on, on their farm."

Another unique aspect of the insurance is the way in which farmers are paid.  When weather stations detect a potential crop loss, insurance payments are automatically made to farmers via mobile phone.

The product utilizes Safaricom's heralded M-Pesa service, which allows customers to send and store money with mobile phones. On July 21, Kilimo Salama made its first payouts via M-Pesa.  The average payout was around $22, though some were as small as $1 and others as large as $3,500.  

Through mobile phones, Kilimo Salam also provides updates to farmers as well as tips for growing crops in challenging regions.  

Kilimo Salama is still in development, but the program appears to be catching on.  First launched in 2009, around 200 farmers were insured.  This year, the program covers approximately 11,000 farmers across Kenya.

A farmer from Siakago in Kenya's Eastern Province, Lydia Njagi, first tried Kilimo Salama insurance out of curiosity.

Njagi says she initially insured around $5 worth of seed before the current growing season.  After weather stations predicted a 15 percent reduction in crop yields Njagi received an initial payment of around one dollar, with more to come if the weather trends continue.  Njagi told VOA she was initially skeptical of the product, but would insure more of her crop for the next season.

Many of Siakago's farmers told VOA they were happy with the Kilimo Salama program, and many more could be seen lining up to purchase the insurance for the first time.

While the insurance program is only available for seed and fertilizer produced by brands certified by the group, Goslinga told VOA the group planned to expand the project and open it up to other producers in the future.

Kilimo Salama has 30 weather stations that cover climate zones about 15 to 20 kilometers in area.  Only five areas in Kenya are currently covered, but the group hopes to build an additional 50 stations this year to cover more farmers by the start of the next season.

You May Like

China May Be Biggest Winner From Ukraine Crisis

Missile sales, oil and gas shipments are among many areas that may drive Beijing and Moscow closer together in coming years More

Obama Faces Chaotic World, Limits of Power

Current foreign policy issues bring into focus challenges for US policymakers who are mindful of Americans' waning appetite for overseas military engagements More

SADC Meeting Lesotho Officials to Resolve Stalemate

Official says regional bloc has been engaged with leaders in Lesotho to resolve political disagreement that led to coup attempt More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
West Africa Ebola Vaccine Trials Possible by Early 2015i
X
Carol Pearson
August 30, 2014 7:14 PM
A U.S. health agency is speeding up clinical trials of a possible vaccine against the deadly Ebola virus that so far has killed more than 1,500 people in West Africa. If successful, the next step would be a larger trial in countries where the outbreak is occurring. VOA's Carol Pearson has more.
Video

Video West Africa Ebola Vaccine Trials Possible by Early 2015

A U.S. health agency is speeding up clinical trials of a possible vaccine against the deadly Ebola virus that so far has killed more than 1,500 people in West Africa. If successful, the next step would be a larger trial in countries where the outbreak is occurring. VOA's Carol Pearson has more.
Video

Video Survivors Commemorate 70th Anniversary of Nazi Liquidation of Jewish Ghetto

When the German Nazi army occupied the Polish city of Lodz in 1939, it marked the beginning of a long nightmare for the Jewish community that once made up one third of the population. Roughly 200,000 people were forced into the Lodz Ghetto. Less than 7,000 survived. As VOA’s Kane Farabaugh reports, some survivors gathered at the Union League Club in Chicago on the 70th anniversary of the liquidation of the Lodz Ghetto to remember those who suffered at the hands of the Nazi regime.
Video

Video Cost to Raise Child in US Continues to Rise

The cost of raising a child in the United States continues to rise. In its latest annual report, the U.S. Department of Agriculture says middle income families with a child born in 2013 can expect to spend more than $240,000 before that child turns 18. And sending that child to college more than doubles that amount. VOA’s Deborah Block visited with a couple with one child in Alexandria, Virginia, to learn if the report reflects their lifestyle.
Video

Video Chaotic Afghan Vote Recount Threatens Nation’s Future

Afghanistan’s troubled presidential election continues to be rocked by turmoil as an audit of the ballots drags on. The U.N. says the recount will not be completed before September 10. Observers say repeated disputes and delays are threatening the orderly transfer of power and could have dangerous consequences. VOA correspondent Meredith Buel reports.
Video

Video Ukraine Battles Pro-Russia Rebel Assault

After NATO concluded an emergency meeting to discuss the crisis in eastern Ukraine, the country is struggling to contain heavy fighting near the strategic port of Mariupol, on the Azov Sea. Separatist rebels are trying to capture the city, allegedly with Russian military help, and Ukraine's defense forces are digging in. VOA's Daniel Schearf spoke with analysts about what lies ahead for Ukraine.
Video

Video Growing Business Offers Paint with a Twist of Wine

Two New Orleans area women started a small business seven years ago with one thing in mind: to help their neighbors relieve the stress of coping with a hurricane's aftermath. Today their business, which pairs painting and a little bit of wine, has become one of the fastest growing franchises across the U.S. VOA’s June Soh met the entrepreneurs at their newest franchise location in the Washington suburbs.
Video

Video Ebola Vaccine Trials To Begin Next Week

The National Institutes of Health says it is launching early stage trials of a vaccine to prevent the Ebola virus, which has infected or killed thousands of people across West Africa. The World Health Organization says Ebola could infect more than 20,000 people across the region by the time the outbreak is over. The epidemic has health experts and governments scrambling to prevent more people from becoming infected. Zlatica Hoke has more.
Video

Video Asian Bacteria Threatens Florida Orange Trees

Florida's citrus fruit industry is facing a serious threat from a bacteria carried by the Asian insect called psyllid. The widespread infestation again highlights the danger of transferring non-native species to American soil. VOA’s George Putic reports.
Video

Video Aging Will Reduce Economic Growth Worldwide in Coming Decades

The world is getting older, fast. And as more people retire each year, fewer working-age people will be there to replace them. Bond rating agency Moody’s says that will lead to a decline in household savings; reducing global investments - which in turn, will lead to slower economic growth around the world. But experts say it’s not too late to mitigate the economic impact of the world’s aging populations. Mil Arcega has more.
Video

Video Is West Doing Enough to Tackle Islamic State?

U.S. President Barack Obama has ruled out sending ground troops to Iraq to fight militants of the so-called Islamic State, or ISIS, despite officials in Washington describing the extremist group as the biggest threat the United States has faced in years. Henry Ridgwell reports from London on the growing uncertainty over whether the West’s response to ISIS will be enough to defeat the terrorist threat.
Video

Video Coalition to Fight Islamic State Could Reward Assad

The United States along with European and Mideast allies are considering a broader assault against Islamic State fighters who have spread from Syria into Iraq and risk further destabilizing an already troubled region. But as VOA State Department Correspondent Scott Stearns reports, confronting those militants could end up helping the embattled Syrian President Bashar al-Assad.
Video

Video Made in America Socks Get Toehold in Online Fashion Market

Three young entrepreneurs are hoping to revolutionize the high-end sock industry by introducing all-American creations of their own. And they’re doing most of it the old-fashioned way. VOA’s Julie Taboh recently caught up with them to learn what goes into making their one-of-a-kind socks.
Video

Video Americans, Ex-Pats Send Relief Supplies to West Africa

Health organizations from around the world are sending supplies and specialists to the West African countries that are dealing with the worst Ebola outbreak in history. On a smaller scale, ordinary Americans and African expatriates living in the United States are doing the same. VOA's Carol Pearson reports.

AppleAndroid