‘Picture-based insurance’ cushion farmers from the impact of climate change

Farmers in Kenya, long dependent on rain-fed agriculture, are facing increasing uncertainty due to climate change that has altered weather patterns.

The unpredictable weather and influx of pests and diseases are some of the worries that growers are now grappling with, restricting their farming activities to avoid incurring losses.

All is not lost though as a climate-smart crop insurance scheme that has been introduced in Kenya, which combines satellite data and smartphone imagery is providing farmers with much-needed protection,

To cushion farmers against climate change and boost productivity and resilience, governments and private sector players have been exploring various financing solutions.

Among them is index-based weather insurance, which relies on satellite images to determine if a particular area — sometimes covering up to 1,000 farmers — has been affected by harsh weather, such as excess rainfall or drought. When impacted by extreme weather, farmers registered with the scheme automatically receive their compensation.

Even though the insurance scheme has proven popular, there have been challenges as a result of the model used to determine payouts. For instance, while the satellite images provide a general view of wide geographical areas, they do not measure rainfall or drought levels at localised or specific areas.

This can lead to farmers not receiving the payouts they need when the crops fail. The smallholder farmers are also expected to incur costs by ‘loss assessors’, who determine if payouts are required to be made to the affected growers, making index-based insurance expensive.

It is for this reason that Agriculture and Climate Risk Enterprise (ACRE Africa) has introduced a new scheme that combines satellite data and smartphone imagery to provide more localised information in the event of weather-induced crop catastrophes.

The initiative is part of the Cultivate Africa’s Future (CultiAF) programme, which is jointly funded by the International Development Research Centre and the Australian Centre for International Agriculture Research.

Dubbed ‘picture-based insurance’ (PBI), the scheme requires selected farmers to periodically take photos on behalf of fellow growers at different crop growth stages — including at planting, mid-season, and before and after harvesting.

This data is then combined with satellite imagery and used by insurance companies and associated agronomists to determine whether a farmer is eligible for a payout and, if so, how much.

Picture-based insurance also provides farmers with access to high-quality certified seeds, input financing, agricultural advice, and agronomist-led information on regional weather conditions to boost their productivity.

“Through the use of satellite and smartphone imagery, and providing eyes on the ground to observe farm management practices, the PBI scheme addresses the challenges of basis risk, discrepancies between insurance payouts and actual farmer losses, and ultimately, poor trust in insurers among farmers,” says Lilian Waithaka, picture-based insurance project manager.

“PBI also promotes the adoption of resilient farming technologies and works to better engage smallholder farmers which helps to further improve trust.”

To ensure that picture-based insurance works on the ground, the scheme relies on ‘village champions’, who are trained on the various aspects of insurance, why crops should be insured, and how different agronomic practices, such as mulching, can increase their yields.

These champions pass on their newfound knowledge and skills to other farmers, to persuade them to take up the insurance product.

Farmers can sign up for picture-based insurance by simply dialling a USSD code on their phones. Payments for the insurance premiums are also completed on their mobiles, using the M-Pesa mobile money service, ranging between Sh50 and Sh1,000.

Once payouts are triggered and verified, the money is sent directly to the farmers’ M-Pesa account.

In Bungoma and Busia counties, where the project is currently being rolled out, 6,000 maize, bean and sorghum farmers have registered with the insurance scheme with 60 champion farmers leading the initiative in the two regions.

“When we launched this project in 2019, the initial idea was for each champion farmer to have 250 farmers in their network. They had even collected all the farmers’ details,” says Patyster Lusweti, ACRE Africa supervisor.

“Then Covid-19 struck, and we were forced to cut to between 20 and 40 per champion farmer to adhere to guidelines on reduced movement and social distancing.”

John Poi Namanjelie, a champion farmer in Bungoma County, practises mixed farming — growing vegetables, fruits, maize, beans, bananas, and sorghum — on his 1.2-hectare farm and was previously only producing enough for subsistence.

But since embracing picture-based insurance, Mr Namanjelie says he has increased his yields and he is now selling the produce at a local market.

He also trains other farmers in good management practices and the importance of insuring their crops.

“Farmers in the area have warmed to the idea of this insurance, mostly because they have seen the payouts happening and because we, their fellow farmers, are the ones selling the insurance,” said Mr Namanjelie.

Adopting picture-based insurance has also provided an unexpected benefit for Mary Nasimiyu, a young farmer in Bungoma.

With access to higher-quality maize seeds as part of the picture-based insurance scheme, Ms Nasimiyu has improved her yields, enabling the farmer to sell her produce at local markets, diversify into other crops and set up a boutique. She has also recruited other young people, the majority of whom had resisted going into farming due to low yields.

“Due to crop diversification and with new ways of farming, I have received a lot of requests from young people who are keen to join farming,” said Ms Nasimiyu.

“I am happy of the small revolution that we are together creating in encouraging more youth to farm.”

As more farmers take up this insurance, there has been growing demand to increase the crops covered and to introduce more inputs to the scheme.

“We recently surveyed farmers’ willingness to purchase other inputs, such as fertiliser and crop protection products, including pesticides and herbicides, if these are incorporated into the insurance scheme,” said ACRE.

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