Smallholder farmers in Rwanda stand to gain from crop farming following the launch of a low-cost insurance that covers weather vagaries and yield shortfalls.
This was preceded by signing of a memorandum of understanding October 11, between Ministry of Agriculture and Animal Resources (Minagri) and the Syngenta Foundation for Sustainable Agriculture (SFSA), a Swiss non-profit organization.
The new scheme dubbed ‘Hinga Urishingiwe’ the version of Kenya’s ‘Kilimo Salama’ currently targets smallholder farmers who currently growing maize and beans on plots ranging from 0.10-1 acres but with plans to include more crops in the near future.
Currently, focus is the districts of Huye, Nyanza, Nyaruguru, Gisagara and Karongi.
The insurance covers loans provided to farmers by the agriculture service provider One Acre Fund/Tubura.
Minagri Minister Dr Agnes Kalibata while launching the scheme emphasised its value to the smallholder farmers, stating that it will change the way they have been doing business as they produce for home consumption and the market.
She added that Government and other stakeholders are ready to work with farmers who will take up the scheme but added that more sensitization was needed on the same.
The average loan to size insured is for USD 15 (Rwf 9,600) and goes at 15% per interest per annum.
Through the farmers will pay the premium as part of their loan repayments for fertilizer and other improved inputs offered by Minagri and One Acre Fund.
“With this insurance our farmers can now protect their families against risk of losing their investments due to erratic weather, said Cor Oudes of One Acre Fund.
And SFSA’s Executive Director, Dr Marco Ferroni, says that when farmers make losses they may fear to put in more investments in the next season, leading to low farm output, adding that is where Hinga Urishingiwe’ insurance comes in.
Hinga Urishingiwe, also supported by Swiss Re Corporate Solutions as a partner, is based on the lessons learned from the project’s operations in Kenya where it has been offering agricultural insurance for the last three years.
To date 73,000 farmers have been insured in Kenya and Rwanda under the scheme. In Kenya, 10,000 farmers have received payouts from the scheme.
Dr Benjamin Mbundu, Managing Director of SORAS Insurance, also a partner in the scheme says that the scheme avoids expensive and lengthy claims procedures.
The product has the potential to make agricultural micro-insurance affordable and attractive for small-holder farmers and economically viable for insurance companies in the country that had previously ignored the agricultural sector.
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