1 min
In the world of farming, risks are numerous from pre-planting to post-planting activities, and any farmer who wants to remain in business must manage these risks efficiently and effectively by building risk mitigation strategies. Without these strategies, farming becomes unproductive, unprofitable and an unsustainable business enterprise.
One of the most important strategies and maybe the cheapest (still debatable) to manage risks especially for smallholder farmers, is through adoption of insurance products, which is a good leverage to reduce loss of capital or revenue.
Over the last few years, agriculture insurance has become a more needed package for farmers as a result of changing climatic conditions and increasing number of shocks that have had adverse effects on the farmers and their livelihood. In addition, micro insurance products were created for smaller farms (typically smallholder farmers). These products are designed to meet their specific production needs and they are affordable and easily available. These products have strived better as bundled products and given to these farmers.
However, the number of farmers who have enjoyed this is still very low (the majority of farmers still do not have access to loan facilities). Also, the adoption of microinsurance products as a standalone product is extremely low because of low awareness by the farmers. Also the costs seem relatively unaffordable and there is a low level of trust from the farmers that insurance companies will pay claims on time, amongst other concerns. We need to correct some of these myths surrounding agricultural insurance to help farmers to manage risks appropriately.
Therefore, more sensitization should be done through radio, jingles, farmers meetings etc on agricultural insurance products by the regulatory body (ies) (and supported by the private companies). Also, we need farmers to access information easily, especially on issues around claims and repayments which has been a major setback. There is a need to build transparency and accountability into the system and we need to adequately communicate this to the farmers. This should be a simple system that can be initiated by the farmers themselves when faced with any challenges around the insurance processes. Such a system must incorporate feed forward and feedback mechanisms that are seamless.
We need more adopters of micro insurance products to help farmers to recover faster from both internal or external shocks that could negatively affect food security. Our food system needs a more proactive approach to build resilience in it, and insurance is one of the good mechanisms to achieve this as we protect our environment, our farmers and the food they produce. This is a better way to future proof our food ecosystem. Let us support it.
Yours-in-Service
Babatunde
Over the last few years, agriculture insurance has become a more needed package for farmers as a result of changing climatic conditions and increasing number of shocks that have had adverse effects on the farmers and their livelihood. In addition, micro insurance products were created for smaller farms (typically smallholder farmers). These products are designed to meet their specific production needs and they are affordable and easily available. These products have strived better as bundled products and given to these farmers.
However, the number of farmers who have enjoyed this is still very low (the majority of farmers still do not have access to loan facilities). Also, the adoption of microinsurance products as a standalone product is extremely low because of low awareness by the farmers. Also the costs seem relatively unaffordable and there is a low level of trust from the farmers that insurance companies will pay claims on time, amongst other concerns. We need to correct some of these myths surrounding agricultural insurance to help farmers to manage risks appropriately.
Therefore, more sensitization should be done through radio, jingles, farmers meetings etc on agricultural insurance products by the regulatory body (ies) (and supported by the private companies). Also, we need farmers to access information easily, especially on issues around claims and repayments which has been a major setback. There is a need to build transparency and accountability into the system and we need to adequately communicate this to the farmers. This should be a simple system that can be initiated by the farmers themselves when faced with any challenges around the insurance processes. Such a system must incorporate feed forward and feedback mechanisms that are seamless.
We need more adopters of micro insurance products to help farmers to recover faster from both internal or external shocks that could negatively affect food security. Our food system needs a more proactive approach to build resilience in it, and insurance is one of the good mechanisms to achieve this as we protect our environment, our farmers and the food they produce. This is a better way to future proof our food ecosystem. Let us support it.
Yours-in-Service
Babatunde
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