Farmers will have to incur more losses caused by climate related conditions since there is no active insurance scheme for the agricultural sector, a new study has revealed.
The feasibility of agricultural insurance report, released on Monday, also indicates that there is no active private sector player offering crop insurance in the country. “This is partly due to a lack of technical expertise and distribution capacity of insurers to develop and service agricultural insurance,” Mr John Ariko, a consultant with Friends Consult limited - a firm that conducted the study said.
The study was commissioned by the Uganda Co-operative Alliance (UCA) to explore the feasibility of agricultural insurance with specific emphasis on weather index insurance (WII) as an alternative risk management approach for farmers.
According to the report, carried out in Eastern and Northern Uganda -areas more vulnerable to hydro-meteorological risks, 53 per cent of what farmers may have obtained is lost in fields due to climatic related conditions. Statistics show that 99 per cent of Uganda’s agriculture is rain fed, which makes it more vulnerable to hostile climatic conditions.
Mr Leonard Msemakweli, the UCA general secretary said although agricultural funding has improved tremendously, banks and micro-finance institution are reluctant to finance the sector due to related risks. “The scenario is complex since the country’s production cannot increase without financial support,” he said.
However, Mr John Okumu, the Equity Bank general manager credit, said several banks have introduced a number of products that aim to promote agriculture financing.
Source - http://www.monitor.co.ug/