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Swiss Foundation Offers Low Cost Insurance to Small-scale Farmers in Kenya

In Kenya, small-scale farmers are particularly vulnerable to the vagaries of weather, often losing their entire investment when droughts or floods destroy their crops. Crop insurance is usually too costly for such operations. But a Swiss-based foundation is now offering low cost insurance through a program called "Kilimo Salama," or "safe farming."

A farmer's worst nightmare. No rain means no crops; no crops means major losses.

Farmers who cultivate two hectares or less are at a disadvantage compared to operators of large-scale farms. Conventional insurance usually costs too much.

But now thanks to the Swiss-based Syngenta Foundation that's changed. Rose Goslinga is coordinator of Syngenta's Agricultural Index Insurance Initiative. "The only thing that farmers can do at the moment is pray for rain," she said. "From my personal standpoint, I always think that there must be more that we can do, there must be more that we can take into our own hands and make our faith happen."

Maize farmers with less than a hectare of land who want to be insured under the Kilimo Salama program can register at local shops participating in the program.

They receive a policy number through their mobile telephone.

Every time registered farmers purchase seeds, fertilizer or other inputs they pay an extra five percent on top of the price.

The farmers are compensated for these inputs if their crops fail because of drought or excess rain.

Josephat Langat owns a two-hectare wheat and maize farm near the western Kenyan town of Eldoret. He says it is worth it for him to pay a little extra for his supplies. "In a case where we do not have a lot of rainfall, it means we are going to lose all the crops. But this insurance policy is going to cover the farm inputs that we use in the farms, so that is going to give us the certainty of going back to the farms again if the rains do not come," he said.

Langat purchases his agricultural supplies at the Maraba Investments Ltd. in Eldoret.

The shop sells some 10 agricultural products that fall under Kilimo Salama. Approximately 200 farmers signed up for the insurance program within the first two weeks that Maraba Investments Ltd. began offering it.

Beatrice Kemboi is a director of Maraba Investments Ltd. She says Kilimo Salama is a win-win arrangement for both her and her customers. "When a farmer elects to join the insurance, we sell the product on wholesale so that the premium is reduced, so that he does not feel it, so that it cushions him and I have also sold the product. You get [farmers] coming because they know they would get a good price for the product they have chosen to insure. That adds value to me because I am able to get more farmers," she explained.

Kemboi says that every day she and her workers register from five to 10 farmers in the Kilimo Salama program.

And, in the event of a drought or flooding, Kemboi says both she and her farmers will be covered. "If they are able to get the money back, you know, they will be attracted to me because I will have introduced them to a good product," she said. "They will always be loyal to me, they will always be my customers."

The technology used in the Kilimo Salama program is both simple and sophisticated. When farmers purchase their inputs, the store clerk uses a mobile telephone equipped with a camera to scan specific barcode symbols that match the product. A text message confirming the policy number and sale is then sent automatically.

Solar-powered weather stations within the insurance area monitor rainfall amount and distribution in the field.

Data gathered by these stations is sent to UAP Insurance Company, one of the program's partners. The company monitors the data. When there is crop failure because of too little or too much rain, farmers are sent a text message informing them to receive compensation from the shop where they purchased their inputs.

Kilimo Salama reaches some 10-thousand farmers in the Kenyan provinces of Central, Rift Valley, and Western.