Plans are underway to draw up an insurance strategy on agriculture in Tanzania.
According to the Commissioner of Insurance, Mr Israel Kamuzora, a meeting of insurance stakeholders was recently conducted to discuss the strategy.It is hoped that by having the strategy, agriculture will be stimulated.
Agriculture is Tanzania's economy mainstay, accounting for nearly 30 per cent of the gross domestic product. Sixty-seven per cent of the workforce was employed in the sector in 2014.
Most Tanzanian farmers are smallholders; few families cultivate more than two hectares. Around 20 per cent of farmers use ox-ploughs, 10 per cent use tractors and the rest till the land by hoes.
The sector grew at 2.6 per cent in 2014, down from 3.1 per cent the previous year.
"Tira [Tanzania Insurance Regulatory Authority] expects that the strategy will be in place within three years," Mr Kamuzora says.
Various agro-insurance models are being used around the world, but Tanzania is looking for the one that fits in its environment.
One of them is that which makes the government or the state as a sole insurer, the second one is when the government subsidises premiums but does not own the insurance business venture and the third is when the government provides re-insurance services but primary cover is provided by primary companies.
Mr Kamuzora says the second model is used in the US, France, Spain and Italy where governments mobilise resources to subsidise premiums for efficient and effective running of agro-insurance businesses. The third model is used in India.
"Tanzania has no vibrant agricultural insurance package and we aim at having the right model."
The head of Agriculture and Rural Finance for Financial Sector Deepening Trust, Mr Mwombeki Baregu, says a government-led national agriculture insurance strategy will be in place to improve farm production.
"Preliminary discussions have been held with a number of development partners to support the implementation of a large-scale PPP [public-private partnership] for agriculture insurance in Tanzania and assist Tira in policy capacity building," Mr Baregu says.
Outassurance managing director Priscilla Karobia supports such initiative but says since the running of agricultural insurance schemes is complex and there are risks, it is important to design packages that are friendly to smallholder farmers.
World Bank official Chloe Dugger says for agro-insurance schemes to be successful, they must be rooted from PPPs.
He speaks about Brazil, India, Spain, Turkey and the US which have succeeded in agro-insurance. Tanzania's small-scale farmers who account for the largest chunk of farmers are dependent on rain-fed farming and their crops are prone to calamities brought about by unfriendly weather which include droughts and destructive floods.
The experts say that since rains have been largely unreliable in the last few years mainly due to global warming and climate change and small-scale farmers have often seen their efforts go to waste and a life-threatening famine zoom in.
Insurance cover can cushion looming hunger when subsistence farmers lose their crops.
Jubilee Insurance one time announced its intention to introduce crop insurance in Tanzania to cover farmers in times of short rainfall but wanted the government to support it in weather and rain monitoring facilities.
