To insure a farmer’s crop in the United States, someone has to visit the land at the beginning of the season and again if a claim needs to be assessed. This adds to the cost and complexity of offering crop insurance in a place like Africa.
Providing crop insurance on a small scale like this is similar to micro-credit, which offers small loans to people so they can start a business. A farmer can insure a 1/2 acre of crops for about two Euros. Although it sounds cheap enough and beneficial, convincing the African farmers to buy insurance initially proved to be difficult. In the first couple months, Rose Goslinda was able to sign up only 185 people for crop insurance. This was not the outcome she hoped for.
Rose came up with a simple way to solve all of the aforementioned obstacles. The cost of insurance is now included in the cost of a seed bag. In the bag there is an ID number that the farmer sends to the insurance company by text message. That location, where the text is sent from, is then monitored by satellite to see if it rains or not in the next three weeks. If it does not rain, they replace the seed so the farmer can start again.
Therefore, the costs are kept low because there are no visits to the farms and historical satellite data of rain in the area makes it easier to place a price on the risk of rain or drought. Depending on the crop they want to grow, which in this case is maize, the amount of water the crop needs is also considered in the equation.
After six years Rose and her team have insured over 185,000 farmers in Kenya and Rwanda. To learn more about her project visit the Kilimo Salama page on the Syngenta Foundation website.