The impact of climate change is becoming more pronounced and directly impacts food systems. Farmers are now dealing with several unique problems caused by this phenomenon, such as disruptive weather patterns, an increase in pests, and farmer-wildlife conflict. To help increase their resilience, the World Bank Group has launched weather index-based insurance.
Now, more than 70 000 Kenyan farmers are making use of this innovation through The One Million Farmers Platform.
“It offers farmers tailored crop insurance plans to help them mitigate crop failure due to adverse weather patterns. This is accomplished through the use of a micro-insurance product known as Bima Pima, which loosely translates to ‘insurance in affordable bits’,” the World Bank said via a statement. “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 ($.50 cents), and can top-up via SMS to increase the level of insurance coverage. ACRE Africa then geo-tags the farm using the mobile localisation service.”
Acre Africa, a World Bank One Million Farmers Platform (OMFP) beneficiary, is one Kenyan organisation that has forayed into these new technical frontiers. In the event of drought or excessive rain on the farmer’s land, a mix of satellite and weather station data is used to assess whether the farmer will receive a payout directly to his mobile account. Farmers may buy scratch cards at local agri-dealers, use the system, top up their account, and pay for the premium in tiny quantities and over time, thanks to a combination of smart design and digital innovation.
Affordable and accessible
Most farmers, 89% of whom had never used insurance services previously, can now afford it thanks to the price plan. For example, a KES 50 premium has a 10% payout potential, which is equivalent to KES 500 and may be used to purchase a bag of seedlings.
“A few days before harvesting, I received an MPESA message from ACRE Africa which was a pleasant surprise. I had forgotten that I had purchased a KES 50 insurance card during a session where they explained that I would be compensated in case of insufficient rainfall,” said Mary Mate, a farmer from Embu County, Kenya. “Now that I see it works, I will continue to purchase this cover.”
Smallholder farmers benefit from the use of technology since it lowers costs, increases profitability, and expands their reach. As a result, more farmers are becoming interested in purchasing insurance across the country. Farmers paid a total of KES 5 million in premiums throughout the last four seasons, from 2020 to 2021.