Based on the creation of a sustainable insurance market in the country and targeting quarter a million of small holder farmers over the next three years, it is estimated that the project will contribute 2 percent to the country’s gross domestic product due to the increase in production of crops such as maize.
WINnERS is an initiative spearheaded by Imperial College of London in partnership with The University of Reading, The University of Hamburg, Ecole Polytechnique and a number of other global institutions, insurance industry experts and food buyers.
Together these organisations are working to develop state-of-the-art weather and climate modeling technology to measure the risk exposure that retailers, buyers, banks and smallholder farmers will face in the future.
Speaking in an interview with The Banker earlier this week in Dar es Salaam, Principal Investigator for WINnERS, Dr Erik Chavez said the project also focuses on improving the wellbeing of smallholder farmers who often bear the brunt of the risk when it comes to crop failure.
Dr Chavez pointed out that the pilot project is set to take place in the country over the course of the rainy season.
“Over the course of the next five years, WINnERS (with the support of the World Bank and the International Finance Corporation will be monitoring the impact of these efforts,” he said.
He added: “This will be on both traditional measurements of wellbeing in farming communities such as income and yield growth, but also on some less frequently investigated indicators such as risk aversion and the impact of scarcity on cognitive function.”
The project also includes a component on the regulatory environment for the use of insurance products in developing countries.
The team is investigating potential barriers to and requirements for the sale of insurance products in project countries as well as seeking solutions to enforcing contracts and protecting the rights of smallholder farmers, he observed.
He underscored that WINnERS on the other hand, anticipates that larger and more established entities such as cooperatives, banks or food buyers will be the insurance policy holders.
“The farmers will be protected through guaranteed markets for their products and debt relief or pay-outs if their production is drastically affected by weather. As the rainfall thresholds for triggering a form of relief will be based on microclimates, the likelihood of basis risk – a mismatch between contractual expectations and performance – is significantly reduced,” he said.
On his part, an Economics Professor from Ecole Polytechnique, Pierre Picard said under the project, an insurance infrastructure is created whereby each party is insured against crop-loss, unlocking access to investment capital for farmers.
“The insurance will protect farmers and make them going to the good direction, will also provide incentives which would help them to get the quality seeds, fertilizers as well as getting agricultural advices,” said Prof Picard.
WFP Tanzania Farm to Market Alliance Coordinator Ananth Raj said that the project by WINnERS will benefit about 15,000 farmers in the country and is expected to enlarge to 250,000 by 2021.
“The project expectations are to get rid of hunger in the country, increase food production as well as the livelihood of the small scale farmers,” Raj said.
The WINnERS Project is a public-private initiative funded by the European Institute of Technology’s ClimateKIC of the European Union with co-funding from the World Bank to create a sustainable food supply chain.