With farmers in Kenya increasingly fearing large weather-related losses to their crops and livestock, and the access to weather data and infrastructure improving, the Kilimo Salama crop weather insurance program launched by UAP Insurance, Syngenta Foundation and mobile operator Safaricom is going to expand in scope and availability.
Kilimo Salama is a weather index insurance product designed to protect Kenyan farmers against crop losses caused by drought and flooding and also some livestock losses. Through this next phase of expansion the program hopes to cover the expected value of farm harvests, more crops and many more farmers.
The new program is being called Kilimo Salama Plus builds on top of the pilot program. It uses a low-cost mobile phone payment and data system that is linked to solar-powered weather stations to issue an insurance policy and rapidly compensate farmers for investments in seeds, fertilizer, and other inputs that are lost to either insufficient or excessive rains. Kilimo Salama Plus retains this innovative approach and expands the initial focus to go beyond just inputs to give farmers the opportunity to insure the value of their harvest. In addition, due to high demand, farmers can now insure a wider array of crops including maize, wheat, beans, and sorghum.
“Agricultural insurance is particularly important in Kenya and elsewhere in Africa today as the extreme weather patterns generated by climate change are introducing greater volatility to food production and food prices,” said Dr. Wilson Songa, Agriculture Secretary of the Minister of Agriculture of Kenya.
Marco Ferroni, Executive Director of the Syngenta Foundation, said, “We have seen 12,000 farmers in Kenya take advantage of the original Kilimo Salama and we should be able to reach 50,000 farmers with Kilimo Salama Plus this year and provide far more insurance options. We have quickly seen this initiative grow from a small pilot program in 2009 to become the largest agricultural insurance program in Africa and the first to use mobile phone technology to speed access and payouts to rural farmers.”
Payouts are calculated based on actual weather conditions collected from a network of 30 weather stations in the covered areas. The weather stations have been renovated and are automated and solar powered. They transmit weather data over the Safaricom mobile phone network. When the data indicates that drought or excessive rainfall conditions are likely to reduce crop yields the farmers registered with that station receive an automatic payout. Payouts are sent direct to farmers phones using Safaricom’s mobile payment and money transfer platform M-PESA.
The technology used to make this microinsurance scheme a reality means there is practically no claims process and no need for an insurance agent to visit the farm to confirm losses. It is still open to misinterpretation, and as with all weather microinsurance covers there will be occasions when the farmer feels he has lost all or part of his crop but the weather conditions did not determine a payout was required. That will always be a risk with these programs but it is much better to have these products available than for the farmers to have no weather cover at all.