Rising returns boost farmers’ uptake of livestock insurance

Rising returns and commercialisation of dairy farming are driving the uptake of livestock insurance as farmers move to secure their enterprise.

The Association of Kenya Insurers (AKI) said Tuesday in Nairobi that the uptake of livestock insurance had recorded a notable rise especially in Kiambu where dairy enterprises continue to enjoy massive investments by local farmers.

AKI statistics show that the uptake of livestock insurance boosted agricultural insurance products usually dominated by wheat, maize and barley and taken mainly by company-contracted farmers.

Joseph Kamiri, the general manager CIC Group, said that livestock insurance had increased by 16 per cent this year compared to a paltry three per cent last year.

Mr Kamiri said the future looks bright as more farmers are seeking insurance services to secure their investments, which has seen a number obtain loans from financial institutions to fund expansion and modernisation of dairy farming units. CIC is a major co-operatives as well as micro insurer.

“Any livestock farmer taking up insurance knows animal husbandry remains a core condition for qualifying for the insurance cover. They know one must also keep a veterinary officer close at hand at all times and this has contributed to increased incomes from sale of milk to processors,” said Mr Kamiri.

Kiambu leads the way in commercialising dairy operations in part due to its proximity to Nairobi. Githunguri Dairy Farmers Co-operative Society in Kiambu, producers of the Fresha brand of whole milk, recently grossed Sh6 billion in annual turnover and has attracted a couple of buyout bids, showing the sector’s immense potential.

READ: New KCC cedes market share to Fresha milk firm

The annual AKI 2014 report shows that agriculture insurance attracted gross written premiums of Sh3.2 billion accounting for 21.5 per cent of the insurance business last year.

The report also shows that underwriting companies earned premiums of Sh1.47 billion out of which Sh490 million was paid out to farmers as compensation for losses suffered.

Mr Kamiri said that enhanced access to the dairy market, especially in big cities, enabled the dairy sector to commercialise where small parcels of land were utilised to the optimum for dairy farming.

He urged co-operative societies to encourage farmers to intensify investments in dairy and securing them through insurance.

“The returns are good and farmers are now able to finance all their projects using funds earned from the sale of milk. This value of investment can only be safeguarded by taking insurance for your cow,” he said.