Effects of climate change such as drought and flooding on agriculture, coupled with crop diseases, have continued to ravage crops in recent years, causing losses on farmers’ investments.

For instance, in Eastern Province districts of Kayonza and Nyagatare, some of the farmers did not get any harvest over the last two planting seasons because of prolonged drought.

These issues of concern in agriculture sector have necessitated the urgent need for agriculture insurance, at least for farmers to get some compensation for crop damages.

However, there is a relief in the offing for farmers, as the Ministry of Agriculture and Animal Resources (MINAGRI) is reviewing the Agriculture Policy that would integrate agriculture and livestock insurance and access to finance, among other components.

The existing Agriculture Policy was put in place in 2004.

The Minister of State for Agriculture, Tony Nsanganira, told The New Times that MINAGRI would work with the private sector in agriculture insurance, adding that the reviewed policy is due to be ready by end of the year.

He said they have realised that farmers accessing agriculture insurance are still few, while others cannot afford the monthly premiums.

"So far, there are products by private companies, but we are working on a policy that will introduce ways to help smallholder farmers who have no means to afford the monthly premium,” Nsangirana said

"The available products have not reached a satisfactory scale. We want the private sector to embrace more agriculture insurance, but we are also developing a policy that will show what we can do as the Government to support the efforts of the private sector.”

He said once the policy is ready – in three months – it will give guidelines for the provision of the needed support to the private sector by the Government.

"The available insurance product to farmers, called weather-based index, does not cover crop failure due to disease as such crop disease insurance product is not available. These are new products that should be developed so that they can comprehensively help farmers,” the minister said, adding that the same applies to livestock farmers.

A Crop and Livestock Insurance Feasibility Study commissioned by Access to Finance Rwanda (AFR) and conducted by the Syngenta Foundation for Sustainable Agriculture, explored the potential of developing crop and livestock insurance in Rwanda.

From the study and field visits, whose results were published in 2012, three factors emerged as obstacles to developing viable crop and livestock insurance; lack of distribution channels in the food crop sector, dominance of management-related risk over production risk in the cash crop sector, and lack of data in the livestock sector. In terms of insurance regulation, several suggestions are proposed to create a regulatory environment. The suggestions are built on experiences in the Indian market where such products were implemented.

They include incentive credit to be extended to rural areas, and making it mandatory to insure agricultural credit, among others.

Rather than subsidising the insurance premiums, the study recommended removal of Value Added Tax (VAT) of 18 per cent from any insurance products supporting the rural sector, as this will instantly make all products 18 per cent more affordable.

Jean Paul Majoro, senior underwriter at UAP Insurance Rwanda Ltd, said the insurer launched the agriculture insurance product in 2013 and has been working with farmers’ cooperatives but that farmers have not yet understood the importance of the service.

Again, some farmers are not aware of the agriculture insurance services or products available.

"Farmers look for agriculture insurance not because they realise it is necessary and beneficial, rather they do it when seeking bank loan as a requirement,” he said.

Majoro said insurance premiums range from five to 10 per cent of the input (investment) or calculated or estimated output (harvest) depending on the number or types of risks covered.

When a farmer has encountered loss due to disaster like drought or floods, he added, the insurer covers from 65 to 85 per cent of their investment.

Farmers’ expressions

Emmanuel Uwitije, from Ruhango Sector of Ruhango District, grows cassava on over 10 hectare-piece of land. He believes if farmers in the district had insurance for their crops, they would not have been affected much by the cassava brown streak disease (‘Kabore’), which ravaged their crops from 2013 to 2015.

"Agriculture insurance is what we have been lacking,” he said, adding that farmers would invest without fear as the insurance would compensate them in case of disaster.

"We are ready to pay premiums. If a person pays insurance for a car, why can’t they pay for agriculture investment that might be even higher, and expect food security as well as return from such investment?” he wondered.

However, Cyprien Semakura, the president of CODPCUM, a maize cooperative in Mukama Sector, Nyagatare District, said sometimes when farmers embrace insurance, they are not compensated in case of crops failure due to disasters as the insurers’ measurements are generic.

"You realise that they base on an entire district measurements for rainfall quantity, yet there is a cell or a particular area that has been affected and farmers have not harvested. They will not be compensated because the district measurement shows that there was no rain,” he said

He said drought also causes losses to farmers, but they are ignorant of how the insurer pays compensation or what it bases on to compensate a subscriber.

Data from MINAGRI shows that agriculture sector generated output grew from Rwf1,188 billion in 2010 to Rwf1,440 billion in 2014.

The average contribution of the agriculture sector to GDP between 2007 and 2014 was 33 per cent, according to the National Institute of Statistics of Rwanda.

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