Econet in Zimbabwe

Photo from the EcoNet Farmer website.

In Zimbabwe, the market-leading telecommunications provider EcoNet Wireless, is packaging and distributing valuable information such as farming tips, health advice, weather information and mobile banking options to engage with rural customers, build brand loyalty, and support the overall image of the company. The company has launched a wealth of feature-phone enabled subset brands, such as EcoCash, EcoHealth, EcoSchool and EcoFarmer.

“EcoFarmer is a revolutionary way of farming using mobile technology. It is Zimbabwe’s first micro-insurance product designed to insure inputs and crops against drought or excessive rainfall. In addition the insured farmer will also receive daily weather information, farming tips and information on when and where to sell, and the best price for their produce,” according the platform’s website. 

The EcoFarmer platform includes the following pieces of information:

·      Daily weather data from a weather station linked to your field.

·      Farming and market tips

·      Free daily rainfall advice

·      Free weekly best farming prices

·      Free weekly crop data

·      Free monthly market pricing requests

·      Crop information

·      Credit rating

·      Free adverts and marketing links

·      Financial linkages

There are three basic levels of subscription. General Farmers get very basic information for free, Registered Farmers provide some information (a monetizable asset for telecommunications firms) and receive expanded information, while Insured Farmers receive all the information, plus a supporting insurance policy. By subscribing to the services for 8 cents per day for 125 days, Insured Farmers are said to be guaranteed a harvest or at least $100 for every 10kg of seeds planted. In an obvious partnership with a sponsor, the seeds have to be SeedCo brand. They provide this micro-insurance “regardless of the weather conditions,” meaning this is not true index-based insurance, rather a smart marketing scheme designed to engage customers, but it’s working and the modality is an interesting one for other African nations. There are currently an estimated 300,000 subscribers. They spun-off the EcoFarmer service in 2015, to launch a separate new service called “Dial-A-Mudhumeni,” a partnership with Zimbabwe’s Ministry of Agriculture that connects smallholder farmers with agricultural extension workers.

Where does the weather information come from? Econet has developed a network of cell-tower-based stations to monitor weather patterns including rainfall, temperature and humidity.  According to TelecomPaper, “Zimbabwe operator EcoNet has inked a partnership agreement with the Metrological Services Department to provide weather information to smallholder farmers. The MSD issues weather forecasts to the public, and EcoNet provides the data platform for distribution. The MSD's new weather station automatically records the parameters and transmits the data to MSD remote stations and its offices in Harare via SMS. The data received at the MSD in Harare will be relayed to the Ministry of Agriculture, Mechanisation and Irrigation Development for policymaking. The new system for weather measurement and monitoring will be installed throughout the country to assist smallholder farmers in accessing information.” They locate the farmers using a smart application connected with the seeds. The seed packs hold a small, plastic container with a specific number that the farmer must send to the network via SMS. As soon as the number is received, the farmer’s location will be noted, and rainfall in the area will be monitored. 

Hot Links

·       Zimbabwe's Robert Mugabe declares drought disaster - BBC

·       Coping with Drought and Climate change (CwDCC) in Zimbabwe

·       Building Climate Resilient Communities in Zimbabwe

·       Esoko 

·      Developing approaches to support smallholder decision making and planning through the use of: historical climate information; forecasts; and participatory planning methods

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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.’  

 

The Importance of Weather and Climate Data: A Perspective from an Agricultural Insurance Provider

ACRE is a registered insurance surveyor with operations in Kenya, Rwanda and Tanzania. Through their insurance products they have facilitated farmers' access to financial products in turn enhancing investment and agricultural productivity. The CIRDA Team has asked Ms. Warimu Muthike, Head of Business Development of ACRE, to provide an industry perspective on climate and weather information needs. 

Agriculture is Africa's economic cornerstone contributing 32% of Africa's total GDP. Despite an increase in urbanization, nearly three quarters of the Sub Saharan African population live in rural areas many of which are rainfall dependent smallholder farmers whose livelihoods depend on agriculture.

While investment in agriculture throughout Sub-Saharan Africa has led to increases in cash crop and subsistence crop productivity, weather risks threaten these gains. As we have increasingly seen, success in agricultural production that can lead to financial stability does not only depend on a farmer's agricultural knowledge. Often time it depends on having the tools to mitigate climate and environmental risks.

African smallholder farmers hoping to increase agricultural productivity are faced with this vicious cycle: 

1. Farmers require capital to invest in production (seeds, fertilizer, equipment) and in risk mitigation tools to increase their chances of a good harvest and more income.
2. Financial institutions deny loans to farmers as they consider smallholders a risky investments. The perceived risk is not only a result of the seasonal nature of production but also from the increased unpredictability of climatic conditions.
3. Farmers have little capital to invest and thus compromise on the quality and quantity of investment leading to lower agricultural productivity. 

In order to break this cycle, risk transfer tools such as agricultural insurance are vital. The effectiveness and suitability of the insurance products developed by companies like ACRE relies heavily on both crop agronomic data and weather information. Without accurate, consistent and accessible weather data the development of relevant weather risk transfer tools is just not possible.

As an end user, ACRE has observed several improvements in access to data that have facilitated the development of the agricultural insurance sector. These include:

• a greater number of private and non-profit organizations investing in research and dissemination;
• greater ease in accessing data from various data sources;  
• a gradual acceptance of the importance and role played by third party data collectors and; 
• an increased recognition of the existence of a business case in the provision of accurate and consistent data. 

However, companies like ACRE continue to face important challenges in accessing reliable weather data and thus limit the amount of coverage that can be given to farmers. These challenges include:

• Lack of consistency in the available data sets of weather and climate information. Agricultural insurance requires several years of consistent data to appropriately assess risk. 
• Limits in the available data parameters. For example long term temperature data is difficult to acquire and yet it is key to develop products that cover losses due to pests and diseases in crops.
• Data sometimes does not provide a true reflection of on ground experiences and topographic variations, thus there is a real need to have access to data that can be used jointly to reflect on ground experience. For example to analyse drought stress on crops analyst require a combination of data measuring precipitation and greenness of a region.
• The emerging business application of weather and climate data appears to be proceeding at a much faster rate than legislature by national meteorological agencies who are the primary custodians of this data.

Linking Climate Information to Index Insurance for African Farmers

Credit: Al Jazeera

Access to insurance is important to agriculture, not only does it protect farmers livelihoods in case of catastrophic losses of their crops as a result of unexpected seasonal changes, but also assures that farmers can quickly recover and replant in order to protect regions from suffering food shortages or long term rise in prices. Unfortunately access to agricultural insurance and disaster insurance is limited  in many developing countries or if available, prohibitively expensive.

With that in mind, the World Bank- together with funding from the EU and the Netherlands- have developed the Global Index Insurance Facility (GIIF) for Africa.  The GIIF seeks to create insurance products for small farmers based on specific defined weather events (known as index insurance) such as inadequate rainfall.  

The advantage of index insurance is that insurance brokers do not need to visit the farm as specific climatological triggers make the policy effective. This results in low transaction costs and the fast disbursement of payments which are crucial to allow farmers to recover quickly and replant. The low transaction costs in turn allow for lower premiums which are necessary to attract small farmers. A key feature of GIIF supports local broker agents by funding implementing partners comprised of an intermediary “broker/agent” that develops index insurance products with local and regional insurance companies who then sell the products. The index insurance products are often bundled with loans or credit and distributed mostly through portfolio-level aggregators such as agribusinesses, banks and microfinance institutions, and cooperatives. The large Dutch agribusiness company Syngenta is an important partner to the GIIF and together launched Kilimo Salama, a social enterprise, to market weather, area yield, and livestock index insurance products covering a wide range of crops and dairy cattle. Kilimo Salama is now insuring 185,000 farmers in Kenya, Rwanda, and Tanzania, with plans to expand into East Africa

As index insurance is dependent on climatological triggers, its success is highly dependent on the availability of publicly available weather data with a high degree of local accuracy. To gain access to climate information it works with partners to provide the necessary data. The project team has so far focused on refining satellite data as a basis for the index working with the Dutch EARS program and recently IRI at Columbia University.  Most of the GIIF implementing partners are using a mix of weather stations and satellites. Ground weather station data can be used for product design or verification of micro climates. Several companies have now been engaged to work on new methods/tools for making better use of satellite data with cooperation from NOAA.  Syngenta, a major partner of GIIF, reportedly started out more than 5 years ago installing local weather stations but found they did not provide the reliability and accuracy required.  

The GIIF and the CIRDA program are both working in Tanzania, Burkina Faso, and Benin, with GIIF planning to expand to for Ethiopia. The CIRDA Team has reached out to the GIIF to envision cooperation possibilities between both initiatives. 

Initiatives like the GIIF demonstrate how important climate information is to development, poverty prevention and food security. It also demonstrates the needs of the financial sector in accessing reliable climate information. By understanding the key needs of climate information to end users it becomes easier to envision ways of reaching them and creating innovative partnerships.