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Business Reporter
ECONET Wireless Zimbabwe has developed a weather-indexed drought insurance cover for smallholder farmers allowing farmers to make a financial claim if their crops fail because of either inadequate or excessive rainfall.
Under the scheme known as EcoFarmer, a farmer can buy insurance for as little as US8c per day deducted from their prepaid phone account during the agricultural season.
In the event of a drought due to poor rains, the farmer will be given as much as US$100 for every 10kg seed pack planted in what will effectively cover participating farmers from drought induced loss of input.
The key to the scheme is a highly innovative weather monitoring network which enables Econet Wireless to know exactly how much rain fell on the farmer’s field to determine whether there was drought or normal rain fall that season.
Econet has partnered with Seed Co to produce special seed packs that contain a small plastic container with a special number that the farmer must text to Econet. As soon as Econet receives the number, the company will know exactly where the farmer is located.
The Econet base station in the farmer’s area monitors weather patterns including rainfall, temperature and humidity. This information is used by weather experts to tell if there has been a drought in that particular area.
The system being developed by Econet is intended to give farmers, particularly smallholder farmers, what is known as weather-indexed insurance cover.
When an insured farmer has peace of mind that crop failure does not mean hunger for the family, they will be encouraged to plant more crops and therefore increase national crop production.
Econet has chosen Mashonaland East province as the location for a pilot scheme, which will run between November this year and March 2014. The system for weather measurement and monitoring has already been installed and the plastic capsules are being put into seed packs for the 2013/4 season.
Based on the results of the pilot scheme, Econet will subsequently expand it nationally, in time for next year’s planting season.
The service being developed by Econet for Zimbabwe is similar to one which has been rolled out in Kenya, Kilimo Salama, by that country’s leading operator, Safaricom, which also pioneered mobile phone banking services in that country.
Kilimo Salama (“Safe Agriculture”) is an insurance designed for Kenyan farmers so they may insure their farm inputs against drought and excess rain.
The project, is a partnership between Syngenta Foundation for Sustainable Agriculture, UAP Insurance, and telecoms operator Safaricom, offers farmers who plant on as little as one acre insurance policies to shield them from losses when drought or excess rain affect their harvest.
Kilimo Salama insurance cover was designed based on the learning of a pilot in Laikipia district in Kenya where several hundred maize farmers insured their farm inputs against drought in the long rains season of 2009.
Following the drought that season, both weather stations showed that there was a payout and all farmers were compensated depending on the extent of the drought as measured at their weather station.
The pilot was the first of its kind in Kenya. Kilimo Salama features many elements—like the mobile phone registry and payment system and distribution through rural retailers—that are micro-insurance firsts.
Online Reporter