Smallholder farmers in Africa will soon be compensated for shortcomings brought about by effects of climate change, according to African Risk Capacity (ARC).
This comes at the time when most countries in Sub Saharan Africa are experiencing a dry spell, triggering a high food shortage.
In Kenya for instance, at least 23 counties are affected with 1.3 million people facing starvation.
Even so, Kenya is ahead of other countries in terms of insuring smallholder farmers from vagaries of climate change.
Speaking at the sidelines of the ongoing Ordinary Session of the African Union Assembly, in Addis Ababa, Ethiopia, Director General of African Risk Capacity (ARC) Mohamed Beavogui singled out Kenya for its effort and challenged other countries to follow suit.
In 2013 the agency established a financial affiliate, the ARC Insurance Company, which offers weather insurance policies to governments.
Members of the ARC risk pool receive payout when rain deviation is sufficiently severe such that the estimated response costs cross a certain predefined threshold.
“Every country has taken different levels of insurance. Kenya has taken the largest high level insurance policy where it has insured farmers in the arid and semi-arid regions during the two seasons of the year,” Beavogui.
Last year, the government in partnership with seven leading insurance companies in the country unveiled plans to issue smallholder farmers with subsidized insurance covers if their expected yields fall by more than 20 per cent
According to the Ministry of Agriculture Livestock and Fisheries, premiums paid by the farmers will be tied to the historical average yield of a particular area with zones with higher yields paying an average of Sh1367 per acre while those with low yield history paying an average of Sh456 per acre
This means that a maize farmer with two acres of maize plant in Trans Nzoia, a high maize producing region in Kenya is supposed to pay Sh2,734, the government will pay a half of the amount.
His counterpart with the same size of maize farm in a low producing region like Wajir is supposed to pay Sh912, with a half cleared by the State.
The modalities of what a farmer in a region is supposed to pay as premium will be arrived at by those insurance companies.
According to the level of policy taken by the Kenyan government, it is able to mitigate the current situation. But if the situation changes in the next two or three weeks, it will trigger a payout,” he added.
ARC, a specialized United Nations agency, is a risk management and resilience platform
