Through the national agriculture insurance scheme, an expert said, the farmers will pay a premium to an insurer to guarantee against losses of property, being crops or livestock.
Executive Director of Agricultural Non State Actors' Forum (ANSAF), Audax Rukonge said in Dar es Salaam on Monday that smallholder farmers face a range of shocks and challenges beyond their control that can have a drastic impact on their incomes and livelihoods.
Rukonge noted that surprisingly, insurance companies have largely overlooked the group hence exposing them to risks that also affect the country. “By bad luck we have car insurance, motorcycle insurance and housing insurance but there is no insurance scheme for the agriculture sector to date,” he said.
He ANSAF chief executive dared Tira to urgently come up with the scheme to address needs and challenges facing farmers and their entire value chain. He pointed out that such losses can be caused by natural disasters including extreme weather conditions in terms of droughts and floods, pests and diseases attacks against crops and livestock.
He noted that the agriculture scheme will help restore confidence in farmers as they have a guarantee that they will be compensated in case anything happens during the farming season. “Sometimes when banks realize that farmers have insurance covers for their products, they can be in position to give loans without hesitation,” he explained.
Rukonge added that without access to formal insurance schemes, smallholder farmers are forced to resort to traditional risk management schemes, such as self-insurance and community funds. Globally, less than 20 percent of smallholder farmers have any form of a agriculture insurance cover while across Sub-Saharan Africa, the figure is less than three percent.