The government is set to inject Rwf25 billion in subsidising agriculture insurance scheme in the next five years, Eugene Kwibuka, the Agriculture Information and Communication Program Manager at the Ministry of Agriculture and Animal Resources (MINAGRI) has told The New Times.
He said that the investment seeks to cover all professional crop and livestock farmers.
"It will also help increase milk production to supply the milk powder plant that will be complete in March this year. As farmers buy more high yielding dairy cows, the insurance will enable them to access finance from financial institutions,” he said.
The insurance cover, he noted, will also attract new investors in fish farming, piggery and poultry.
The government, this year, added fishing farming and bulls to the subsidized insurance scheme.
"The uptake of the insurance scheme is still low and therefore insurance companies are also still counting losses,” he said explaining the rationale behind the insurance support in the next five years.
So far 97,674 cows, 420, 179 poultry, 8,614 pigs, 81,073 hectares of crops have been covered under the subsdised insurance scheme benefitting 513,000 farmers.
Rwf1.6 billion subsidies have already been injected in the scheme.
The insured crops include rice, maize, potatoes, pepper, french beans, soybean, beans and cassava.
The livestock include dairy cows, pigs and poultry.
In 2021/22 at least 27, 968 hectares of crops and 204, 391 livestock were insured.
In 2022/23, over 31,000 hectares and 278, 754 livestock were insured.
Government plans to insure 37, 998 hectares and 483, 145 livestock in 2023/24.
Insurance triggers Rwf2.5 billion loans to farmers
Since 2019, at least Rwf2.5 billion has been given to farmers as loans from financial institutions after proving that their crops and livestock were covered by the national agriculture insurance scheme according to a report by the ministry of agriculture and animal resources.
The scheme, which is subsidised at 40 per cent by the Government, is intended to enable farmers to easily access funding from financial institutions and ensure the flow of credit to the agricultural sector.
Rwanda targets to double agriculture sector lending from the current 5.2 per cent of the total share of loans from financial institutions to 10.4 per cent by 2024.
The assessment report shows that so far Rwf4.2 billion have been disbursed to insurance companies that are working with the government to insure crops and livestock.
Farmers whose crops were affected by disasters got Rwf1.4 billion as compensation while pig, poultry and dairy farmers got Rwf1.1 billion.