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Climate Change Threatens African Agriculture, Insurance Offers Hope

By Shingirai Vambe

In the small village of Chiredzi, Zimbabwe, sorghum farmer, Miriam Moyo has been struggling to make ends meet. Climate change has brought unpredictable weather patterns, devastating her crops and threatening her livelihood. Like many small-scale farmers in Zimbabwe, Miriam has limited financial resources and no safety net to fall back on in times of crisis.

With the vagaries of climate change and lack of innovation to increase and bring up relative schemes and packages in the Agricultural sector, one reason why  most farmers don’t have safety nets. Majority being small scale farmers, they envy for low premium schemes which they can afford and make them see a feasible future in the Agriculture sector.

Moyo has heard about a new kind of insurance that could change her fortunes. Index-based insurance, which pays out according to a predetermined index for asset and investment losses, has been gaining popularity in Zimbabwe. The insurance is designed to protect farmers against large-scale or regional risks, such as droughts or floods, which are becoming increasingly common due to climate change.

“In many African countries, the majority of farmers are smallholder entities engaged in household agricultural production consisting mainly of rainfed and subsistence agriculture. African farmers are already experiencing economic and non-economic losses and damage, mainly through impacts on livelihoods from crop losses due to climate change . These include yield reduction and lower productivity of the staple crops,” said Moyo.

“There has been a reduction in maize yield by 5% in Southern Africa,” added Moyo.

The call by Insurance and Pensions Commission of Zimbabwe (IPEC) for insurance companies to be innovative, has seen players in the industry coming up with Index-based Insurance mainly covering and focusing on smallholder farmers.

Rusape farmer, Ernest Njinjika, told the Post On Sunday Newspaper that one cannot be a tobacco farmer without being insured especially with the rate at which climate change is affecting every sector globally.

“The cost of insurance per hector is almost US $4000 and it should be an irrigated crop, which is a difficult thing for most small holder farmers, given the opportunity suitable schemes should be put in place for serious farmers who would want to cover their crops in case of any disaster,” said Njinjika.

He shared an experience after his tobacco was ravaged by a hailstorm and within 24 hours, his crop was assessed and he was 100 percent compensated.

Meanwhile, In Chiredzi, most farmers have since shifted from cattle ranching, focusing on sugar cane while others do cotton, sorghum and groundnuts, due to geographical and  climatic conditions. the production of these cash crops has however, gone down due to human wildlife conflict exacerbated by climate change and the region being heavily infested by wild animals, crops are always destroyed in the lowveld.

The index based Insurance is only but a relief to many planting cash crops. As the rainy season approached, Moyo felt sorry for herself, without an insurance to fall back on. She invested in new seeds and fertilizers, hoping to improve her yields and increase her income but the shift in season has seriously affected farmers and their yield in the 2024-25 summer cropping season.

Moyo’s story is just one example, one in need of an index-based insurance to help small-scale farmers in Zimbabwe adapting to climate change. By providing a financial safety net, index-based insurance can help farmers invest in their farms, improve their productivity, and build resilience to climate-related risks.

However, there are still challenges to overcome. Index-based insurance is not always accurate, and payouts may not be triggered even if a farmer experiences losses. Moreover, the insurance may not be tailored to the specific needs of each farmer, which can lead to disputes and dissatisfaction.

Despite these challenges, index-based insurance has the potential to revolutionize the way small-scale farmers in Zimbabwe adapt to climate change. By providing a financial safety net and encouraging farmers to invest in their farms, index-based insurance can help build resilience and promote sustainable agriculture practices.

The potential benefits of index-based insurance are not limited to farmers like Moyo in Chiredzi. The insurance can also help to promote economic growth and development in rural areas, where agriculture is often the main source of income.

In Zimbabwe, the government has recognized the importance of index-based insurance in promoting agricultural development and resilience to climate change. The government has launched initiatives to promote the use of index-based insurance among small-scale farmers, including subsidies and training programs.

NGOs and private sector companies are also playing a critical role in promoting index-based insurance in Zimbabwe. Organizations such as the Zimbabwe Farmers’ Union and the Commercial Farmers’ Union are working with insurance companies to develop and promote index-based insurance products that are tailored to the needs of small-scale farmers.

As the use of index-based insurance becomes more widespread in Zimbabwe, it is likely to have a positive impact on the country’s agricultural sector. By providing a financial safety net and encouraging farmers to invest in their farms, index-based insurance can help to promote sustainable agriculture practices and build resilience to climate-related risks.

Speaking with Journalist weeks ago, Agricultural Finance Cooperation (AFC) insurance company managing director, Cuthbert Masukume said some countries particularly in East Africa (Kenya and Uganda) have developed National Agriculture Insurance Policy to provide a national framework regarding insurance for the agricultural sector and Zimbabwe Government in partnership with the International Finance Corporation ( a member of the World Bank Group) is developing the agriculture Index based on the insurance framework for smallholder farmers.

Insurance provides farmers with the financial protection they need to manage risks and invest in their businesses. In the event of losses caused by risks such as fire, hail, droughts, floods, pests and diseases insurance payouts can help farmers to recover and continue their agricultural activities. Insurance also provides financial security for farmers who take loans to invest in their business, by mitigating risks, insurance contributes to the growth and development of the agricultural sector.

The dairy sector is not spared. Rusape milk producer, Mawoko told this publication that there was need to engage and educate smallholder farmers in the dairy sector with growing cases of diseases affecting livestock and production of milk in the region.

“Despite having an increase in milk production in Manicaland Province, small scale farmers need education, they need support and tailor made schemes to cover their cows meant for milk production,” said Mawoko.

“It is business and it need insurance cover, just like any other business, while livestock, just like human beings, they need to be covered,” added Mawoko.