Agriculture insurance could solve most of risks associated with farming, an economic undertaking that employ around 80 per cent of Tanzania’s population.
It is well known that such uncertainties induce substantial income risks that can be detrimental to small or poor producers in developing countries.
Such uncertainties have been blocking about 80 per cent of the population depending on farming from accessing lending houses.Finance and Economic Affairs Minister, Ms Saada Mkuya Salum, said in an interview that agriculture insurance has shown to be a way of increasing small farmers’ access to seasonal loans in many countries and may have similar role to play in the country.
“I call upon the Tanzania Insurance Regulatory Authority (TIRA) to speed the process of formulating the regulations, guidelines for agriculture insurance to operate,” she said, adding that lenders have traditionally regarded agriculture as being too risky.
Farming in developing countries is exposed to a variety of income uncertainties ranging from fluctuation of prices and unpredictable weather patterns, thus holding back efforts to lift people out of poverty.The absence of crop production credit is a bottleneck to access and adoption of improved farming technology, certified seeds, fertiliser and plant protection chemicals.
The Commissioner for Insurance, Mr Israel Kamuzora, said agriculture insurance will be extended to cover losses of livestock, fisheries and forestry caused by vagaries of weather and other events beyond farmers’ control.
With production risks like vagaries of weather and prices uncertainties for agricultural inputs and outputs and with the insurance sector shunning the sector, threefifth of the farmers in the African continent still practice subsistence farming.
“Crop and agriculture insurance is fundamental to the national economies as adverse weather events like drought, floods and storms that cause heavy losses to farmers pose a major threat to production and reduced farmers’ incomes,” he said.
Furthermore, the Bank of Tanzania (BoT) and TIRA have been working on the formation of a special unit to oversee the establishment of an indemnity cover in crop and agricultural sector to ensure farmers are free from various risks particularly those related weather.
In another development, the government has called upon the insurance companies to make timely compensations of the victims of motor vehicle accidents.
Ms Mkuya made the plea at the launch of the TIRA workers council and the customer service charter. Although there should be concerted efforts from both state and nonstate actors to curb the alarming rate of motor vehicle accidents, she said however, the same endeavour must be put by insurance firms to pay for the damages.
“There are increased motor vehicle accidents but the pace with which the insurance companies are paying the claims has been very small,’ she said. The 2013 statistics show that losses due to motor vehicle accidents reached 3tri/.
Source - http://www.dailynews.co.tz/
