Millions of dollars are due to be paid out to small-scale farmers in Zambia affected by a recent severe dry spell, following the introduction of a new government insurance scheme powered by University of Reading science.
Satellite-based rainfall estimates for Africa produced by the University’s TAMSAT research group have allowed around US$2.8m to be triggered for farmers in 370 locations in Zambia between December 1 2017 and 20 January 2018.
More than a million farmers are benefiting from the new mandatory insurance scheme, introduced by the government last year to protect farmers against poor harvests due to extreme weather events. The weather index insurance scheme – the largest of its type ever run in Africa – is run by Risk Shield, which uses TAMSAT data. The scheme is integrated in the Government of Zambia’s Farmer Input Support Program (FISP).
The University of Reading’s TAMSAT group has been generating rainfall estimates across Africa using satellite imagery since the 1980s, and recently made daily rainfall estimations available for the first time.
Ross Maidment, a TAMSAT scientist at the University of Reading, said: “Weather risks, especially dry spells and drought, regularly affect farmers in Zambia. Receiving an insurance pay-out, or additional input subsidies in case of adverse weather events, enables farmers to purchase food, reinvest in farming and to diversify their farming. Ultimately, this could mean the difference between life and death for some families.
“We are proud that the University of Reading is at the heart of this insurance scheme, which is already helping to protect millions of people in Zambia from damaging weather.”
Africa often experiences long periods of very dry or very wet weather, but its population is vulnerable to sudden changes due to the impact on crop harvests. Zambia, like much of Africa, experiences a highly variable rainfall climate.
While above-average rainfall conditions were expected at the start of the season due to a weak La Niña phase, the recent dry conditions were unexpected, highlighting the variable nature of the seasonal rains. The new scheme safeguards against such weather shocks by paying out when very low or very high rainfall occurs. In excess of US$2.8m is due to be paid out since the start of 2018 – unprecedented for this type of index insurance scheme anywhere in Africa.
FISP is a national social security program for delivering subsidies for farming inputs to small-scale farmers. In the 2017/18 season, the subsidies are delivered digitally through an E-Voucher system to more than 1,054,000 farmers via debit cards. It means it likely supports in excess of six million people within these households, as well as the wider population who rely on agriculture for food or work. The scheme is the single largest agriculture micro-insurance scheme in Africa to date.
The farmers pay 100 Kwacha – around $10 – for the insurance policy, which offers a maximum possible benefit of around $170 per farmer. The deal between Risk Shield and the Zambian Government started in late 2017 and runs through to April this year (the end of the rainy season).
Agrotosh Mookerjee, Consulting Actuary and Managing Director of Risk Shield Consultants, said: “This scheme triples the overall insurance penetration of Zambia and is a key driver of growth for the insurance sector and agriculture value-chains in Zambia.
“Up to 50% of a farmer’s crops can be destroyed during severe dry spells but, thanks to this scheme, the farmer’s production cost is insured and this also enables the farmer to buy inputs again in case of bad weather conditions.”
Article source/image credit: University of Reading