Government designs new insurance package for agriculture

The government has designed a crop insurance package that seeks to commercialise agriculture. The package dubbed the Weather Index Insurance will be a simplified form of insurance, where payouts will be made based on a weather index, than measurement of crop loss.

“The index is selected to represent as close as possible the crop yield loss likely to be experienced by farmer,” Mr Newton Jazire, the Lions Assurance executive manager operations said early this week.

He said the programme has been tested in countries including Mexico and India for about five years now and in Malawi for the past three years.

The programme protects farmers against eventualities such as drought, where rain measurements are made at a reference weather station during a defined period of time. Hence insurance payouts are made based on pre-established scale set out in the insurance policy.

The Ministry of Agriculture, permanent secretary, Mr Vincent Rubarema said the new policy will hedge farmers against droughts and banks against lending risks.

“This innovation will reduce credit risk, thereby facilitating support for small holder farmers,” Mr Rubarema said in a speech read for him.
He however said the insurance industry needs to grow a proper meteorology with good historical data, good knowledge of water requirements as well as organised farmer’s associations in order to inform its decisions while deciding on payouts and compensations.

msseubuyira@ug.nationmedia.com