Maize farmers will benefit from weather insurance

Jun 06, 2011

Before 2010, Akiteng Scholar was battling the problem of floods that hit the whole of Uganda's Teso region, resulting in the need of food aid. Last year, it was drought which has driven many households apart. Weather insurance policies might be a way to protect the farmers.

According to the minister of state for relief, some family heads left their homes, leaving the women to take care of the household. This is due to the harsh weather conditions that many families in Teso and some other regions of the country have been facing, Scholar said. The floods washed away crops, houses and animals, while the drought meant that the crops in the gardens weathered and dried up, and animals died due to lack of pasture and water. Such bad weather conditions have been affecting the whole country in the past without any mode of compensation. Many farmers have been resorting to financial institutions for loans, but in vain as the financial institutions were not ready to lend out money for agriculture, saying that the agriculture sector has too many risks. Due to the sometimes devastating effects of weather on people's livelihood, some financial institutions are now finalizing policy issues so as to offer weather index insurance to farmers in Uganda. Weather index insurance is a policy that compensates farmers whose crops suffer bad weather conditions such as drought and floods, among other weather related problems. Under this arrangement, the insurance firm compensates farmers for the expenses and losses incurred when their crops get affected by bad weather. Payout is calculated by taking the amount of rainfall measured at a local weather station and applying the insurance payout formula in contract terms and conditions. The first beneficiaries will be farmers from Northern Uganda. The managing director of Lion Assurance Company, George Alande, who are partnering with Centenary Bank to offer the service, said that they are focusing on the maize producing areas and the maize crop in particular. Lion Assurance is currently reviewing data from Ngeta in Arua district so as to finalize the policy document. “We need at least five years of data from any area that we go in. Currently we have gone to Ngeta in Arua and we got the date and we are finalizing the policy document for farmers in that region together” said Alande. The success of the policy depends on the correct and accurate weather information in addition to trained staff. “But the hindrance has been the meteorological department. Basically you may have information that has some gaps.” Alande adds that they are also looking for data from other areas to carry on the program on other crops. Prossy Nandudu, Kampala, Uganda