Farirai Machivenyika-Senior Reporter
GOVERNMENT has been urged to provide budgetary support for an insurance scheme designed to protect smallholder and rural farmers from climate change-induced losses.
The recommendation is contained in submissions made by the Insurance and Pensions Commission (IPEC) to the Parliamentary Portfolio Committee on Budget, Finance and Investment Promotion for consideration in the upcoming National Budget.
The call comes ahead of an expected drought triggered by the El Niño weather phenomenon.
In 2024, the Government, IPEC, and development partners launched an indexed insurance product for smallholders dubbed the “Farmers’ Basket: Grain for Premium” scheme. Under this initiative, communal farmers pay an insurance premium of either US$15 or its equivalent value in grain.
However, IPEC noted that uptake of the scheme has remained low since its inception.
“Cover is still small; many farmers remain uninsured against drought. We recommend budget support to scale up the Farmers’ Basket and Grain for Premium, so that more farmers are protected against drought,” IPEC stated in its submissions.
The pilot phase of the project was conducted in Goromonzi, where participating farmers who paid the US$15 premium received a US$65 payout following agricultural losses.
The Commission emphasised the importance of buffering smallholders against climate-related shocks, including recurring droughts and floods.
Concurrently, IPEC called for fiscal measures to incentivise long-term savings and inclusive insurance penetration within the informal sector, communal farming communities, and underserved households.
“Microinsurance, micropensions and agricultural insurance can extend cover to those who need it most and encourage long-term domestic investment, while pension and insurance assets remain prudently protected.
“We recommend targeted partnerships to expand coverage and mobilise long-term savings,” reads part of the submissions.
