Kilimo Salama – Taking food security a step further - 03
54-year-old Anastasia Kithinji is a typical farmer in Kenya. Her livelihood depends on the yield she gets from just two acres of land.
African farmers like Anastasia are acutely exposed to weather risks because rain is often the only form of irrigation. Too little rain during the planting season, or too much towards the harvest, can have devastating effects. Anastasia invests all her resources in seeds and fertilizers. If the crop fails, she can only afford poor quality seeds to plant for the following season.
Insurance can make a real difference to someone like Anastasia. But the cost of providing cover, and because sales and claims are hard to manage, means that insurers have traditionally found it difficult to help smallholders in Africa.
Serious droughts are not uncommon and can wipe out an entire harvest every ten years.
For a smallholder like Anastasia, this once meant that for every 10 dollars she spent on seeds and fertilizer, it cost her an extra dollar for insurance. This may be a small sum for the insurer, but for Anastasia it's a massive cost.
Helping her needed a fresh perspective. The answer lay in Kilimo Salama – "safe farming" in Kiswahili – and Swiss Re teamed-up with no less than six partners to make it happen.
Swiss Re worked with the Syngenta Foundation for Sustainable Farming, Syngenta East Africa Limited, the agri-businesses MEA Limited, phone company Safaricom, Kenya's Meteorological Department and the NGO CNFA/AGMARK. A pilot project was launched 2009 with 200 farmers in Nanyuki province, 200 km north of Nairobi.
Kilimo Salama makes it easy for farmers to buy insurance, and easy to make a claim. The cost of cover is bundled-in with the cost for seeds and fertilizer, and is in part subsidised by seed and fertilizer producers. This adds value to their product and makes the insurance more affordable.
And farmers don't need to make complex claims if their investment is affected by weather conditions. If there is too little rain, or too much, payments are triggered by measuring the rainfall at weather stations just a few miles away.
Kilimo Salama needs hardly any paperwork. When the farmer buys seeds or fertilizer, confirmation of the insurance cover is texted to their mobile phone. The same happens with the payout, which is transferred to their mobile phone account in an instant.
These innovations make Kilimo Salama more viable for insurers, and make it more attractive for farmers like Anastasia. For someone who once thought that insurance was expensive and unreliable, Kilimo Salama has changed her perception – she has benefited from a quick and easy payout every year since she joined the programme in 2010.
In Anastasia’s case the expertise applied by Swiss Re and the project partners is more than a safety net. It gives farmers opportunities they hadn’t had before. Because Anastasia has insurance, she can get credit. She can buy seeds with a higher yield, and she can decide when and where to sell for potentially higher earnings.
And insurance has made her less dependent on a single crop, so she can farm a wider range of produce, most of which she sells. All in all, Anastasia’s two acres today generate a higher and more diversified yield compared with three years ago.
Along with Anastasia’s success, Kilimo Salama has also grown. Today more than 60,000 farmers in Kenya and Rwanda buy the insurance, which now covers not only maize and wheat but also other crops and livestock.