Linking Smallholder Farmers to Insurance

This blog and many other stories of innovative projects in Africa will be featured in an upcoming UNDP publication that examines 'A New Vision for Weather and Climate Services in Africa.' To receive a copy of the publication, slated for launch in March 2016, contact Greg Benchwick (gregory.benchwick@undp.org). (Photo Courtesy ACRE)

By Diana Rodriguez, Acre Africa 

The Agriculture and Climate Risk Enterprise, better known as Acre Africa, links farmers to insurance products so that they can confidently invest in their farms and protect their futures. The company seeks to foster equity, fairness and innovation in the agricultural sector through localized solutions that reduce climate-associated risk. 

Acre Africa is not an insurance company, but rather a service provider working with local insurers and other stakeholders in the agricultural insurance value chain. The company is registered as an insurance surveyor in Kenya, an agent in Rwanda and has applied for registration as a microinsurance agent in Tanzania.  

The Acre Africa team undertakes risk assessment, product development and risk monitoring to facilitate access to insurance products for smallholders. With tailored microinsurance products, farmers can confidently invest in quality inputs, increase their productivity and access agricultural loans. The team has developed insurance products to cover a variety of crops against weather risks like drought, storms, flood and erratic rains, as well as other production risks.  

At the core of Acre Africa’s operations is access to weather data to build effective and suitable index insurance products. Without accurate, consistent and accessible weather data the development of relevant weather risk transfer tools is not possible.  

As a consumer of quality data, Acre Africa continues to face challenges in accessing reliable weather data. These challenges include:  

·   Limited capacity among technical personnel to accurately model weather data.

·   Consistency in available data sets whereby missing and short series data limits capacity to model trends.

·   Deficiencies in available data parameters (e.g. long term temperature data) curtail the types of insurance policies that Acre Africa can develop to cover a wider variety of agricultural risks such as pests and crop diseases.  

·   Slow availability of improved technologies to better approximate the on-the-ground experience and reduce instances where existing data do not give a true reflection of ground conditions. 

·   Emerging and dynamic business applications of weather data are often hindered by the slow progress of enabling and regulatory environments to support them (e.g. National Meteorological Agencies are often primary custodians of weather data and they are often not equipped or allowed to work with the private sector).

Acre Africa’s ability to develop and scale agricultural insurance products for smallholder farmers depends on increased research and development across the African continent to ensure the provision of quality weather and climatic data. In this respect, there is a need to foster cross-sectorial partnerships to optimize data usage and spread technologies that have already been developed. For this reason, Acre Africa welcomes collaborative approaches with government, private sector and other partners to transform agriculture into a more professional, productive and food-secure system for smallholder farmers.  

Acre Africa evolved from the Kilimo Salama project, established in 2009 and funded by the Syngenta Foundation for Sustainable Agriculture and the IFC’s Global Index Insurance Facility (GIIF). To learn more, visit www.acreafrica.com. 

Resources 

Explore the new opportunities improved weather and climate information could bring to lower risk and foster resiliency for Africa’s most vulnerable populations. This extended examination on agricultural insurance provides deeper exploration on a topic explored in ‘A New Vision for Weather and Climate Services in Africa.’