Most farmers in
These loss-triggering perils are responsible for the reduced food security on the continent. Therefore, it is imperative to find appropriate risk mitigation and transfer solutions to ensure uninterrupted production and processing systems.
- Farmers purchase crop insurance to protect against either the loss of their crops due to natural disasters or the loss of revenue due to declines in the prices of agricultural commodities.
National Bank of Commerce(NBC) in Tanzaniahave an Agricultural Insuranceproduct in collaboration with Jubilee Insurance Companyaimed at protecting farmers, fishermen, and livestock keepers in the country against losses when they experience various disasters that may affect their production.
It is important to look at the entire food production and processing value chain, minimize or eliminate food leakages, and add risk transfer solutions such as crop insurance to close the loop.
Role of crop insurance in smart agriculture
The insurance sector, over time, has curated products that contribute to the protection of the different aspects of living, individual and corporate bodies. The agriculture sector has not been left out, with the provision of appropriate insurance products to minimize the impact of these loss-triggering events on food security.
Insurance companies provide adequate financial compensation in a timely manner to enable the sourcing of required food resources without waiting for government or donor assistance.
Insurance provides farm income stability by compensating the losses to the farmers in a timely efficient and manner. It ensures that the farmer is kept on the farm doing what they know and loves best, farming, thereby contributing to food security.
The majority of the farming community in
“We are very close with the agricultural sector, and that’s why further we always appreciate the contribution of farmers to the country’s economy. Based on the same fact, we consider it good to come up with the agricultural insurance product for farmers and that in proving the effectiveness of the product, it is only recently we compensated the tobacco farmers in the Tabora region whose crops were affected by the bad weather,” noted NBC Bank Head of
digital agriculture and crop insurance
The penetration of risk management solutions in agriculture in
In addition, the lack of enhancing technology needed for early warning and weather & climate observation systems also impacts the way the African continent perceives risk and adapts to the impact of the risk factors that threaten food security.
According to an article published by
“At the start of the agricultural season, a farmer buys a Bima Pima scratch card with a bag of seeds or fertilizer, activates the card through his phone, pays an initial premium of KES 50 (
A combination of satellite and weather station data then determines whether the farmer will receive a payout directly on his mobile account in case of drought or excess rain on his land. The mix of smart design and digital innovation offers the farmers the ease of buying scratch cards at local agri-dealers, the use of the system, the ability to top up, and the options to pay for the premium in small amounts and over time.
According to an article published by Microsoft on
Farmers sign up for Oko using their mobile phones. Oko then uses historical data and weather data to analyze the insurance risk and determine the policy cost. Suppose the real-time data shows a serious drought or flood. In that case, Oko pays farmers immediately, eliminating the need to file a claim and ensuring farmers bounce back from a poor season much faster than before.
Having some assurance that their labor won’t be completely lost if there are weather problems is a huge relief for those farmers with their eyes on the sky and their hands in the dirt.
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