Sundaymail Editor
Nelson Gahadza
THE Farmer’s Basket agricultural insurance initiative, introduced by the Government and its partners to cushion vulnerable smallholder farmers against the potential impact of climate change-induced risks, has been extended to seven other provinces for the 2024/2025 farming season.
This follows the highly successful pilot project conducted in Goromonzi district, Mashonaland East province, during the 2023/2024 season.
The pilot phase demonstrated that the insurance scheme could be replicated across the rest of the country’s farming provinces. The development is expected to drive rural economic growth.
Farming is an integral element of Zimbabwe’s economy, providing livelihoods to hundreds of thousands of farmers and contributing more than 12 percent to gross domestic product.
Last year, Zimbabwe’s economic growth was estimated to have slowed down from 5,3 percent in 2023 to 2 percent due to the impact of the El Niño-induced drought, which devastated agricultural output.
Growth is projected to rebound to 6 percent this year, according to Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube, driven by the recovery in agriculture, following good rains received in most parts of the country.
The Farmer’s Basket seeks to protect smallholder farmers against early and/or late dry spells, and multiple production risks that result in reduced yields.
While 4 014 smallholder farmers from 21 wards in Goromonzi district registered to participate in the pilot project, only 1 800 paid the requisite premium of US$15 each.
Each member of the group received a payout of US$65 following the El Niño-induced drought.
Insurance Council of Zimbabwe (ICZ) chief executive officer Mr Donald Muthe hailed the smallholder insurance scheme as progressive.
“More than 20 411 smallholder households have been onboarded for the 2024/2025 agricultural season,” he said.
He said in addition to Mashonaland East, the insurance programme had been extended to Matabeleland North, Matabeleland South, Mashonaland West, Mashonaland Central, Manicaland, Midlands and Masvingo provinces.
In an interview, Zimbabwe Farmers Union (ZFU) secretary-general Mr Paul Zakariya said the insurance scheme is a useful tool as it protects smallholding farming enterprises from the adverse effects of nature, disaster, errors and many other risks.
“We need to ensure that every farmer in the country, regardless of size, is insured. But the major issue are insurers themselves, who have to become more sensitive to agriculture, particularly smallholder agriculture.
“They need to come up with more products that are suitable and affordable for the smallholder sector so that it begins to enjoy the benefits of insurance,” he said.
Mr Zakariya said many insurers are still very traditional; they still tend to serve the interests of large-scale commercial farmers.
“They have products for large-scale farmers and not very much for smallholder farmers; therefore, we need cover for smallholder farmers so that they do not lose out,” he said.
The ZFU director said insurers must conduct demonstrations to showcase to everyone that farms in a given area were insured and the owners eventually received payouts when disaster struck.
“That is what attracts more attention and awareness. If done effectively, it will bring in more and more farmers and farms to be insured. So, whatever form of insurance (is made available), it is the way to go in any form of business,” said Mr Zakariya.
Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube, during a payout ceremony in Goromonzi last year, said the Government recognised the importance of easing the financial burden on smallholder farmers.
As such, the Government is ready to subsidise insurance premiums for smallholder farmers. He said the subsidy will help make agricultural insurance more accessible, ensuring that more farmers benefit from these innovative risk mitigation products.
The minister noted that agriculture remains the backbone of the country’s economy, and smallholder farmers are at the heart of this initiative.
However, farming in general has not been without its challenges. Farmers continue to face headwinds, including issues relating to climate change.
Erratic rainfall patterns, prolonged droughts and other climate-induced risks have threatened production, productivity and income security, putting farmers’ livelihoods at risk.
The Government is spearheading agriculture index insurance, supported by its partners, including the Insurance and Pensions Commission, the Access to Insurance Initiative, the Insurance Council of Zimbabwe, farmers and development partners.
The Insurance Council of Zimbabwe, which formed a consortium of short-term insurance companies to provide cover to farmers, said payouts may be necessitated by weather- and/or yield-related factors.
Under weather index insurance, participating farmers are paid if they experience early and/or late dry spells. The basis of weather monitoring is mainly satellite data.
In terms of the area yield index, participating farmers are paid if the average yield in the area is below the normal yield, as specified by a yield trigger level.
A smallholder farmer in Goromonzi, Mrs Sipiwe Kandiero, said during the pilot phase of the project, many farmers in the area were sceptical about the initiative.
“However, when we saw some farmers receiving their payouts, we decided to join the programme this season so that we would also benefit at the end of the season,” she said.
Online Reporter