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Capital Markets

Farmers to get Sh117m insurance payout for crop failure

Agriculture cabinet secretary Peter Munya with Apollo Investments chief executive Ashok Shah
Agriculture cabinet secretary Peter Munya with Apollo Investments chief executive Ashok Shah. PHOTO | DIANA NGILA | NMG 

Six underwriters partnering with the government in a crop insurance scheme Wednesday released Sh117.5 million in compensation to 25,000 smallholder farmers for climate-related crop losses.

Agriculture Cabinet Secretary Peter Munya said the payments will be made to farmers in 28 counties.

Mr Munya, who spoke in Nairobi, said the crop insurance programme that involves local underwriters APA, Amaco, Jubilee, Geminia, Kenya Orient and CIC Group with international backing from Swiss Re was meant to revolutionise how Kenyans practiced farming.

“It is no longer a trial and error enterprise but a serious endeavour where a farmer should be able to borrow money to fund their farming activities without fear of their properties being seized when their crops do badly. Crop insurance is the way to go for higher yields and better farm husbandry,” he said.

APA chief executive Ashok Shah said since 2016, pastoralists who insured their animals have also received Sh700 million for animals killed by drought, while another 37,500 farmers received Sh217 million for crop loss.

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Mr Shah said the payments are proof that insuring crops and livestock made commercial sense as farmers and pastoralists were able to concentrate on their activities as well as invest heavily without fear of suffering irreparable losses.

The crop insurance programme(CIP) mooted in 2016 creates a safety net for farmers taking up insurance for farmland of between a half-acre to 20- acres.

CIP is modelled on the Area Yield Index Insurance (AYII) mechanism piloted and by 2019, it has attracted 409,000 smallholder farmers in 27 counties insuring their crops against a loss risk of Sh2 billion.

Mr Munya said that by the end of this year the programme will be extended to cover 33 counties.

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