Millions of farmers and livestock keepers are feeling the pinch of disasters that continue to cause havoc as they are yet to get crop and livestock insurance.
While some farmers say low uptake of insurance is caused by hesitance of insurance companies and banks that are concerned of risks in the agriculture sector which is still vulnerable to climate change effects, the Ministry of Agriculture says it also requires changing mindset for some farmers.
Despite thousands of farmers suffering from the disaster effects, figures by PSTA 4 -the Sector Strategic Plan for Agriculture, show that less than half per cent of farmers report using agricultural insurance despite availability of insurance since 2012.
A report by the Ministry of Emergency (MINEMA) indicates that in 2020, disasters damaged 5,968.653 hectares of crops and 458 hectares of forests and killed 3,491 livestock.
Disasters also damaged 10,610.45 hectares of crops and killed 2019 2,979 livestock in the previous year.
Joseph Museruka , the Programme Manager for the National Agriculture Insurance Scheme (NAIS) in the Ministry of Agriculture and Animal Resources said that there is a need to strengthen the campaign to mobilize farmers so that they embrace agriculture insurance to minimise losses caused by disasters.
Under the subsidized crop and livestock insurance scheme that started in 2019, the Government contributes 40 per cent of the premiums, while the remaining 60 per cent is paid by the farmer.
"We continue to mobilize farmers through their cooperatives. So far over 90 percent of rice farmers have agriculture insurance. More efforts are needed for maize farmers, Irish Potato farmers, French beans and Chili farmers,” he said.
So far he said over 160,000 farmers growing rice, maize, pepper, French beans, Irish Potatoes and others on 29,300 hectares have benefitted from subsidized insurance.
"Government has so far provided subsidies worth Rwf348.8 million to farmers. Insurance companies have so far compensated disaster-affected farmers with Rwf446.6 million and livestock keepers with Rwf222.5 million,” he said.
He added that agriculture loans worth over Rwf1 billion have been provided to farmers enabled by agriculture insurance taken as collateral in banks.
Gap in livestock insurance
According to statistics from Rwanda Agricultural and Animal Resources Development Board (RAB), Rwanda has over 5.3 million chickens and 1.38 million pigs. The country produces an estimated 9,000 tonnes of eggs, 37,300 tonnes of chicken meat, and 23,000 tonnes of pork per year as of 2019.
However, Museruka said that by March this year, subsidized insurance scheme had covered 31,084 cows, 37,970 poultry and 2,246 pigs.
Financing gap
About Rwf400 million was invested in crop and livestock insurance in 2019/2020.
According to Nationally Determined Contributions (NDCs), a 10-year climate plan submitted to the United Nations Framework Convention on Climate Change (UNFCCC) last year, Rwanda needs finance worth $109.6 million to expand crop and livestock insurance by 2030.
It shows that there is a need for $18.2 million from 2020 to 2025 and $91.3 million from 2025 to 2030.
The plan says there should be joint efforts among the ministry of agriculture and animal resources, banks, insurance companies and private sector.
"We urge farmers and livestock farmers to leverage subsidized insurance schemes. We urge insurance companies to provide insurance products to farmers and compensate them on time in case of disasters. We also urge banks to facilitate farmers to get loans since insurance can work as collateral,” added Museruka.
Expanding crop and livestock insurance is among many measures that could help the agriculture sector adapt to climate change effects.
Other adaptation measures in the sector include developing climate-resilient crops and promoting climate-resilient livestock at the cost of $24 million, developing climate-resilient post-harvest and value addition facilities and technologies at $200 million.
Measures also include strengthening crop management practices at $3 million, developing sustainable land use management practice and developing sustainable land use management practices in need of $346.1 million finance while expanding irrigation requires $2,261 million.