Taking digital crop insurance to farmers

Tuesday May 04 2021

An agent from Inputi delivers farm inputs to farmers in Hoima District. PHOTO/Paul Murungi

By Paul Murungi

The idea of insurance is a novelty especially among many Ugandan farmers. Some are unable to access indemnity based insurance services due to low awareness coupled with a high cost of premiums.

For long, insurance providers have largely overlooked smallholder farmers due to the cost of acquiring and serving rural customers in remote locations, making farmers a less profitable customer segment for the industry.

However, Mr David Lukwago wants to change this narrative with Inputi- a digital platform housing a digital crop insurance scheme targeting small holder farmers.

Lukwago premises on Uganda’s potential to be the food basket of East Africa.

The climate change crisis looms large across Africa and the globe, and this is already affecting those in the agricultural sector in Africa through floods, drought and storms. This in particular, is affecting small scale farmers who rely consistently on natural weather for farming to earn a living.

Before the idea was born in the USA by Lukwago and his classmate Mr Adrian Skott at Harvard Kennedy School of Government in 2019, he had previously worked on an agribusiness enterprise for six years. This grounded in understanding the plight that farmers faced , especially with climate related effects, but also access to the market.  


“I used to be a vendor with World Food Programme (WFP). I would aggregate maize from farmers, process it in Jinja, and package and deliver it to WFP stores,”he says.

 Some of the WFP contracts led him to cross borders and travel the region to countries such as Kenya, Rwanda, Tanzania, Zambia, and Burundi.

Crop insurance

 Lukwago explains that crop insurance is traded on the platform as a commodity, just like farm inputs.  The insurer covers up to 75 per cent of the farmer’s expected crop yield against losses that are caused by natural disasters. These include floods, drought, and anything in this category. 

 “Disasters are a common occurrence these days. When a farmer loses his/her crop yields say due to floods, they lose everything and go back to square one.  It doesn’t have to be that way!,” he says.

 Lukwago says the farmer receives up to 75 per cent of what they expected to earn if the disaster did not strike. If they expected to earn Shs1 million after harvest, they will be compensated with  Shs750,000 in cash.

 The premium is charged at 5 per cent of the expected value of the yield. Lukwago who’s currently working in conjunction with the government notes that the premiums have been subsidised.

 “While the premium for Shs1m would be Shs50,000 per planting season, payable by the farmer, they (farmers) pay almost half depending on the circumstances. The Government of Uganda pays the difference on behalf of the farmer,” he says.

 The programme is currently being launched with a small group of farmers in Hoima and Kikuube Districts.

 “We have just launched this product and we are using our agents that are closer to farmer groups. In the coming seasons, we shall be taking the programme to the 35,000 farmers that we are currently serving in Western Uganda,” he says.

  He adds: “In future, anyone with access to a smartphone will be able to purchase crop and animal insurance in the comfort of their home.”

 To ease access to funding and training of farmers, Lukwago has partnered with MINET, a Pan African insurance company and Prosper Mama Africa, to collectively grow demanded crops.

These will help to provide technical and implementation support for the insurance program for the small holder farmers in various parts of Uganda. The programme will also rely upon sensitization, implementation, and monitoring of the farmers projects and will address financial literacy, and risk management.

The digital platform is also a new Agritech marketplace with a last-mile delivery solution. This provides rural smallholder farmers to market their farm produce to national and regional buyers and get paid a fairer price through the in-built payment portal.

 Farmers are also able to check for quality farm inputs such as seeds, fertilisers, pesticides, access to credit for the inputs.

Supply chain challenges

 Lukwago says the technology is to enable smallholder farmers to leapfrog the chronic challenges in the agricultural supply chain that have cut these farmers off the market and hence trapping them in a vicious cycle of poverty, food insecurity, and malnutrition among children.

“By linking farmers to inputs and markets, and providing them with access to affordable credit and insurance solutions, we believe that communities will not only be transformed but will develop resilience,” he says.

Whereas the main beneficiaries of the innovation are poor smallholder farmers, however, it remains clear these same farmers have limited access to smartphone technology, and live in areas with poor internet connectivity.

 Lukwago says they work with youth in the communities as input agents.

 “If the youth have no smartphone, we provide one. We also have a call centre in Kampala which processes farmer orders on phone,” he notes.  

With the African Continental Free Trade Area in operation, Lukwago hopes to scale the digital solution across the continent.