The Sunday Mail
As the country continues to reflect on last season’s ravaging drought that hit the entire Southern African region, the need for farmers to insure their crops is increasingly becoming unavoidable.
A large chunk of farmers, particularly beneficiaries of the land reform programme, have always considered the idea of taking-up insurance for their crops as an afterthought -not least an extra cost on their operations.
Plot holders of A2 and A1 farms – in particular the latter which measure less than 10 hectares – often forego insurance policies for their crops, as they see insurance premiums as nothing more than extra cost to their operations.
However, with the effects of climate-change now an ever-growing threat and many farmers making significant losses from uninsured crops, agriculture insurance has become a most viable pre-condition for farmers before they plant their crops.
Local players in the insurance sector say some of their products assist in ameliorating the effects of climate change, despite its pervasive effects.
Zimbabwe Commercial Farmers’ Union president, Mr Wonder Chabikwa, said the value of insurance to farmers cannot be overstated.
“This is a very critical aspect for every farmer especially in the wake of climate-change induced weather vagaries. In the tobacco sector, it is encouraging that the number of insured farmers is usually very high and this is mostly due to the risk associated with hailstorms, which are a common challenge for tobacco farmers.
“However, for other crops, the ratio of uninsured farmers is very high and we need to come up with strategies to close the gap.”
Asked what recommendations the ZCFU has to encourage farmers to take up insurance, Mr Chabikwa called for a strategic relationship between insurance companies and farmers unions.
“We need to meet the insurance companies more often. Most of them go directly to the farmers but I think it would be better is they create a relations with unions so that there is an integrated and broader platform to discuss issues.
“I believe that creating a platform for regular communication with unions will result in a situation where all the farmers’ concerns can be addressed at an integrated platform. Through such forms we can negotiate the premiums paid by farmers while increasing the numbers of farmers who take up insurance. It will result in a win-win situation for all.”
According to Mr Chabikwa some farmers have raised concern that they encountered challenges in receiving compensation from insurance firms when the need arose, adding that “these are some of the matters that we can deliberate on if we can have a platform to meet insurance companies”.
Old Mutual head of claims, Mr Kudakwashe Rufudza, said agriculture insurance covers three broad categories which are crop insurance, livestock insurance as well as agri-assets such as farm buildings, equipment and machinery.
He said for crop insurance, cover is provided for negative impact from the effects of fire, hail, pre-germination, frost, drought or too much rain as well as the storage and transit risks and applies to variety of crops including maize, soya, wheat, tobacco and barley.
The upshot of these types of insurance cover is that the effects of climate change such as drought or too much rainfall can be covered under various policies.
According to Mr Rufudza the weather index provides of lot of protection for farmers to hedge against the vagaries of weather.
“Weather index – is a simplified form of insurance, where payments are made based on a specified weather ‘index’, for example, too much rainfall or drought.
“The insurance protects the value of farming inputs. If there is a drought or too much rainfall in an area, the insurance policy will pay out a portion of insured value of inputs depending on the damage caused.
“A payment is triggered by the length of the dry spell or of excessive continuous rains,” he said.
Recently, Zimbabwe Farmers Union (ZFU) director, Mr Paul Zakariya, noted that out of a total membership of 350 000 active members, only 11 percent are insured, noting that more needs to be done to educate farmers on the benefits they stand to accrue from insurance policies.
Some farmers professed ignorance on insurance while others said they had registered under a mobile operator that offers agriculture insurance.
The climate change conundrum looms large over farmers but it is generally agreed that in cases where risk management fails and disaster strikes, insurance is always the answer.