Weather index-based insurance long overdue

Michael Magoronga, Midlands Correspondent
DURING a graduation ceremony at Mlezu College of Agriculture in Kwekwe recently, the authorities at the institution raised one concern after another with the hope that Government officials and other dignitaries in attendance could proffer solutions.

In addition to thefts and vandalism of equipment at the establishment, the institution’s Acting Principal, Mr Leaphias Nyawha said despite having received above-normal rainfall last summer farming season, most of their maize crop got waterlogged and did not make it.

This means that the effects of climate change were felt despite a huge amount of rainfall that was received.

“The college received 1 120mm of rainfall for the season and this resulted in 90 percent of the maize being waterlogged and very little maize was harvested. The college however, harvested hay for beef as well as cabbages, leaf vegetables and onions,” said Mr Nyahwa.

The situation at the college is reflective of the negative consequences of the above normal rains that were received in some areas during the 2020/21 agricultural season.

Zimbabwe is vulnerable to extreme weather events such as drought, flooding, cyclones and heat waves owing to climate change.

As a result, farmers end up counting the losses. Smallholder farmers are normally the worst affected as they have no risk mitigation measures to protect themselves against the effects of climate change-induced risks.

To this end, authorities have mulled introducing weather index-based insurance that is appropriate for smallholder farmers to protect them against unpredictable weather patterns.

Speaking at a journalists’ mentorship programme on insurance and pension reporting recently, Insurance and Pensions Commission (Ipec) Insurance Director, Mrs Sibongile Siwela said plans were afoot to introduce the innovative insurance product in Zimbabwe.

She said the intention was to protect farmers against the effects of climate change.

“We are on the verge of agreeing on terms with a development partner to assist with a feasibility study on weather-based insurance in Zimbabwe,” she said.

“This is a result of the adverse effects of climate change which the country is currently faced with. We are yet to come up with a climate-related risk insurance and we believe that if the feasibility study establishes that weather index insurance can be viable in Zimbabwe, then this will go a long way in protecting vulnerable farmers who are exposed to the vagaries of the weather.

For example, whenever there is a drought, farmers lose both crops and cattle.  The intention therefore, is to ensure that as a country we come up with risk mitigation measures to reduce the impact of climate change through compensation for losses.”

Although weather index-based insurance cannot be the sole solution, it can go a long way in complementing other programmes such as Pfumvudza and the Presidential input scheme.

Several African countries have embraced weather index-based insurance among them Kenya, Uganda and Zambia, which has helped shield smallholder farmers in those nations against the effects of climate change.

Economist, Mr Eddie Cross thinks that the implementation of the insurance can be key but was quick to point out that the way it is introduced will be of critical importance.

Mr Cross said premiums may be too high for the insurer to justify.

“The country has been suffering for a long time now. It’s key that such insurance be made available. My worry though is that the premiums would have to be quite high to justify the risk,” said Mr Cross.

While concurring with Mr Cross, agronomist, Mr Ivan Craig is of the opinion that the payments should not prejudice the farmer at the end of the day.

“As a farmer, I would want full cover in the event of loss. If I lose in the field, I wouldn’t want a situation where I’ll be compensated at the farm and fail to send my children to school. I would prefer total cover where little charges cover everything,” said Mr Craig.

The concept, he said, is very good if well implemented.

“It is a very good thing if it takes off well and they know how to stick to their word.  We have been suffering from the effects of climate change for a long time. The sectors have been changing in the way they handle issues in tandem with climate change. I don’t see anything wrong with the concept at the end of the day,” said Mr Craig.

He gave an example of the tobacco insurance which provides total cover saying the weather index-based insurance should do likewise. — @michaelmagoron1