Agriculture insurance is a national necessity

Ms Obel, a resident of Tororo was very excited about the prolonged rains late last year that she planted an additional five acres of the maize crop hoping to cash in on this good fortune.

This was before, Striga, a common parasitic plant laid waste to her entire plantation. With this misfortune went the over Shs5 million she had invested in the venture.

In Magoro Sub County, Teso, a similar and equally devastating story was playing out. Mr. Atim, an aspiring cattle rancher, lost his fledging herd to a rare livestock disease. His dreams of reaping big from the Naads provision faded away much like his cattle.

Agriculture provides a significant economic base for the country employing about 80 per cent of the population either directly and indirectly, while contributing about 22.5 per cent to GDP.
The government and donor driven programmes that provide more disease resistant crop and animal breeds, as well as grants and advisory support, to farmers across the country have been largely welcomed.

However, despite efforts made and the overwhelming contribution of this sector to the country, agriculturists especially small scale farmers who dominate it, remain severely constrained.
This is particularly so in areas involving risk.
All this lays the argument for access to a type of insurance tailored to the needs of the local farmer.

This would serve to compliment, and surely improve on efforts made thus far by the government, the donor community and individuals.
Agricultural insurance provides a relatively simple and yet affordable risk management option for even small scale farmers.

It provides payment to policyholders in the event of loss or destruction due to disease, pests, drought, floods and other forces of nature.
Compensation is at market prices for the loss incurred in the case of crops; especially well cost of veterinary treatment for sick animals and monetary value of the animal at the time of purchasing insurance in the case of total loss.

For a country endowed with fertile soils and favourable climate, agriculture provides the potential for economic muscle globally if appropriately harnessed.

Much has been said about what needs to be done to transform this sector from one of subsistence and hobby farming, to a well planned and adequately resourced venture.

Insurance is a major stakeholder, and together with existing strategies must form part of the framework into achieving this transformation.

The author is a Chartered Insurer and works for the Insurance Regulatory Authority of Uganda , fmpagi@ira.go.ug