Tech-based insurance scheme to cushion farmers against losses

A veterinarian marks a cow during the launch of Agriculture and Livestock Insurance Scheme in Mukingo Sector of Nyanza District, Tuesday, April 29, 2019. Courtesy.

Perusi Mutumwinka, 79, has lost six cows in the past three years, which is an irreversible loss for her, since her cows were not covered by any insurance so she could be compensated.

One of the cows died while giving birth, she narrates to The New Times from Nyanza District as she recounts the dramatic event that befell her livestock animals.

The resident of Mukingo Sector of Nyanza District has some 15 cows currently, and she would not like to go through a similar experience.

Gérardine Mukeshimana, Minister for Agriculture and Animal Resources, giving her speech at the event. She said farmers can use insurance contract to easily get loans from financial institutions.

Fortunately, Mutumwinka and many other farmers’ hope has been revived thanks to the Agriculture and Livestock Insurance Scheme launched in Nyanza District on Tuesday.

A joint initiative between government and private sector, the scheme will see farmers pay 60 per cent of the premium, while the government will support the farmer by the remaining 40 per cent in subsidy.

The insurance premiums that are covered at 4.5 per cent of the total value of the insured livestock per year, but gets the total amount of money that their livestock is worth in case of any incidence.

Perusi Mutumwinka says that livestock insurance is a relief because, through compensation, it will protect her from losses. / Emmanuel Ntirenganya

This means that a cow worth Rwf300,000 will have a premium pegged at Rwf13,500 annually. The farmer pays Rwf8,100 of that fee while the government covers the rest.

Pierre-Claver Karasira, another farmer from Nyanza District, said he incurred huge loss when his seven cows died last year, two of which lost life while they were giving birth. Now, his herd has been reduced to eight cows.

“Some cows died of disease. If there was insurance, I could be compensated. That is why this insurance is of great importance for farmers countrywide,” he said.

Mutumwinka and Karasira are among hundreds of farmers who lost their cows owing to several factors such as diseases and drought.

In fact, over 2,400 heads of cattle in Eastern Province died during the last fiscal year as a result of a prolonged drought that hit Rwanda in the 2017 farming season, according to information from the Ministry of Agriculture.

In addition to the drought catastrophe, Rift Valley Fever – a deadly and infectious cattle viral disease – affected livestock in 2018, killing 154 cows in the country.

Speaking during the launch of the scheme, Gaudens Kanamugire, the Chairperson of the Association of Insurers in Rwanda (ASSAR), said that this was a momentous day in Rwanda as it is the first time the government and private sector have undertaken a joint insurance agriculture and livestock project.

“This is a major step toward improving access to insurance services,” he said.

In the beginning, Kanamugire said, three insurers; Radiant, SONARWA and Prime Insurance were chosen to offer the services, but other firms will be included after a two-year pilot phase which has been rolled out in eight districts.

“We will provide quality service and prevent any impediment to the progress of this initiative,” Kanamugire promised.

Gérardine Mukeshimana, the Minister of Agriculture and Animal Resources said that the project is in line with the country’s move to fast-track development through ensuring sustainable agriculture and livestock productivity.

She encouraged farmers to embrace the initiative and make the most of it.

“If the farmer who insured a cow worth Rwf300,000 takes an insurance policy to a financial institution, it will give them access to a Rwf50,000 loan to grow grass and get enough fodder for the cow,” Mukeshimana remarked.

Given that 70 per cent of Rwandans are farmers, the minister said it means that “if they do not develop, it will be difficult for us as a country to develop as a whole.”

Since insurance is based on the value of the insured product, she advised farmers to strive for optimising yields and enhance the value of their activities.

Advanced technology

Farmers will be able to pay insurance premiums through mobile financial transaction, and get message.

Later cows will get an earmark, which is incorporated in the ear using a special tool, by a veterinarian.

Then, a device will record data, including the unique identifier registration [number] of the cow that is on the earmark, and the date of registration.

A veterinary enters such records and adds the name of the owner, location, as well as a specific feature that the cow has, in a mobile-based system.

Such information is directly accessible by an insurance company and the Ministry of Agriculture and Animal Resources.

Then the insurance firm will be able to cross-check the data to see whether it matches with the requirement before drawing a contract between the firm and the farmer.

In case of disease, veterinarians will treat the cow but, when there is an epidemic to which it succumbs, the case is reported and farmer gets due indemnity within seven days of the incidence.

Mukeshimana said the incorporated earmark tracks information including where the cow is, whether it has been well fed, or has fallen sick, among other factors.

According to the brains behind the technology, it will help know the exact number of livestock with insurance cover and those which are uninsured, thus enabling effective monitoring.

The cows eligible for insurance those aged between eight months and eight years, which have milk production potential.

But, after two years of the implementation of the initial phase, the project will include other livestock animals before it is extended to crops.

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