The Government is working in partnership with the International Finance Corporation to develop an agriculture insurance index for smallholder farmers, as efforts to insulate them from the extremes of climate change and the subsequent crop losses and food insecurity gather pace.
Finance and Economic Development Minister revealed this during his 2023 budget presentation saying the Government was seized with tailor-making agricultural insurance services suitable for smallholder farmers as a way of ring-fencing their operations from the vagaries of climate.
"The project commenced in early 2022 and is expected to run until June 2023 with the expected outcomes set to include the regulatory framework for agriculture index insurance and the setting up of knowledge exchange forums among other market development initiatives," said Prof Ncube.
The emergence of climate change has made it necessary for farmers to have insurance to mitigate losses that can affect production continuity, which can be addressed as the Ministry of Lands, Agriculture, Fisheries, Water and Rural Development is slanted towards sustainable production.
Prof Ncube added: "To build and improve resilience of smallholder farmers against the impact of climate change, the Government alongside Zambia is participating in an initiative facilitated by Access to Insurance aimed at introducing innovative insurance solutions to the sector."
In addition, the Government will continue to restructure the sector to mitigate potential risks to the expected output largely from climate change impacts of floods, droughts and uneven distribution of rainfall.
The Minister stressed that a farmers' insurance basket prototype that cover life, drought, pests and diseases had been developed and would be launched, as a pilot project in Goromonzi during the 2022/23 agricultural season.
Despite the opportunities and the ongoing transformation of the agriculture sector, the financial sector has largely been hesitant to support agriculture, as they are still to develop effective mechanisms of mitigating risks associated with the smallholder sub- sector such as low payment and crop failure due to climate change.
Agriculture insurance has been on an all-time low with only 3, 5 percent of the country's farmers having insurance as a result of the general mistrust in the insurance industry.
Zimbabwe Farmers Union (ZFU) secretary general Mr Paul Zakariya recently urged agriculture insurers to evolve and accommodate farmers to improve on their insurance uptake.
Insurance cover offers various advantages, as it can help farmers improve on agronomic practices that are vital for high production and productivity.
Agriculture insurance can help farmers in accessing capital from financial institutions, as it guarantees production and returns in the capital intense agriculture sector.
Source - https://www.herald.co.zw
