The long-awaited agriculture insurance scheme will be launched next week to ease access to finance and credit by farmers, and cushion them against losses induced by disasters or diseases that affect their crops and livestock.

The National Agriculture Insurance Scheme (NAIS) will be launched on Tuesday, initially as a pilot project in ten districts.

Initially, it will cover maize and rice as well as cows before being rolled out across the country and covering a number of other crops and livestock.

This will be the country’s first insurance scheme that is specifically dedicated to the agriculture sector, which employs over 70 per cent of Rwandans in working age group.

The scheme is expected to manage risks and losses amongst smallholder farmers and provide insurance coverage, to improve access to financial services and ensure flow of credit to the agriculture sector.

Officials from the Agriculture ministry said the scheme will specifically target small-scale farmers allowing farmers to access finance and credit increasing the overall productivity at the farm level.

The scheme, which will at the national level be launched in Nyanza District, is also meant to make effective use of government subsidies to the sector and provide standard insurance contracts and create employment both at the farm level and along the value chain.

Government, through the Agriculture ministry, signed a Service Level Agreement (SLA) with three local insurance companies, namely SONARWA, PRIME and RADIANT, which agreed to adhere to the overall procedures and implementation guidelines of the scheme.

All farmers in the pilot districts are eligible to benefit from the insurance scheme that is subsidised up to 40 per cent.

According to officials, crop insurance will start with Gatsibo, Nyagatare, Bugesera, Gisagara, Kirehe, Gicumbi, Huye, Rulindo, Ngoma and Rwamagana districts.

On the other hand, livestock insurance is being availed in eight districts: Nyanza, Gicumbi, Musanze, Rwamagana, Gatsibo, Ruhango, Nyagatare and Burera.

According to figures from the Ministry of Emergency Management, disasters are responsible for the destruction of 9,412 hectares of crops while 797 deaths of livestock were recorded last year alone.

In 2017, a total of 5,111 hectares of crops were affected while 589 livestock were killed, according to officials.

Rwanda also in the recent past experienced the Fall Army Worm that devastated 32 per cent of the cultivated area of maize on 20,526 hectares.

Speaking to The New Times on Wednesday, Joseph Museruka, the NAIS project manager at the ministry, said the scheme was approved by the Government early last month to pilot with crop and livestock insurance.

The official launch of the livestock insurance is due on Tuesday in Nyanza District while crop insurance will be launched along with the farming season A 2020, he said.

Museruka said that international experience suggests that sustainable, scaled-up agricultural insurance programmes are based on a strong partnership between the public and private sectors, with engagement, innovation, and action required from both sectors.

"Under the scheme, the Government of Rwanda will contribute 40 per cent of the premiums, while the remaining 60 per cent will be met by the farmer,” he said

The market premium rate is 4.5 per cent for livestock insurance.

The crop insurance premium will be decided at the beginning of the season and will be calculated per hectare given the risks estimated at season, according to Museruka.

"Insurance is one of the effective and efficient risk transfer mechanisms for farmers,” he noted.

According to Ayandev Saha, the general manager of K.M Dastur Reinsurance Brokers Private Limited, the company that provided technical assistance in the implementation of the scheme, it is appropriate to have such a scheme and it was proven successful.

"The scheme has worked in different countries, including in East Africa. It allows farmers to access finance to invest in agriculture, unlike currently when people prefer to invest only in agri-processing,” he said.

However, it is important to understand that insurance is a risk transfer mechanism and not a risk mitigation tool, he said.

Apollinaire Gahiza, the president of a rice farmers’ federation, FICORIRWA, underscored the importance of the scheme.

"This is a positive move, as farmers, we have suffered a lot from lack of insurance for our crops and counted losses in case of disasters,” he said.

"It is even better that we will access the scheme with a 40 per cent subsidy. Actually, at some point, we wished to get where we could even cover the total cost,” he added.

Eric Mbonigaba, the director of Agriculture and Livestock at the Private Sector Federation (PSF), the insurance was long overdue.

"The insurance will also cover losses in case of disasters, such as floods and droughts,” he added, noting that losses in post-harvest handling of Maize amounted  to over 30 per cent.

editor@newtimesrwanda.com