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Sunday, 28 February 2021 18:56

The role of agricultural insurance

Written by

Farming is a risky business and farmers face a number of risks that include diseases, pests, weather related, input supply and market related. This poses a threat to the farmers’ income, agricultural credit institutions and the nation at large. There are a number of ways in which such risk can be reduced and managed. Crop diversification, intercropping, farm fragmentation are some ways used by farmers to reduce risk. One sure way to manage agricultural risk is insurance. 

Agricultural Insurance offers great benefits for farmers. Insurance enables farmers to invest in profitable risky enterprises  as they are guaranteed reimbursement should anything insured for goes wrong.  This results in increased production and reduced imports thus saving the nation of the much-needed foreign currency. 

Insurance also reduces the risk of loan defaults. This enables banks to lend more resulting in high productivity. Insurance empowers small scale farmers by enabling access to funding. 

Agricultural insurance is your primary tool for risk sharing, and can take the form of credit insurance (to cover loan default), crop insurance, livestock insurance, weather insurance, property insurance (to cover theft or fire), etc.

About Old Mutual Insurance 

Old Mutual agricultural insurance covers three broad categories which are crop insurance, livestock insurance as well as agri-assets such as farm buildings, equipment and machinery.

The crop insurance, cover is provided for negative impact from the effects of fire, hail, pre-germination, frost, drought or too much rain as well as the storage and transit risks and applies to variety of crops including maize, soya, wheat and barley.

Old Mutual offers Multi-Peril crop insurance cover, a yield based cover for field crops (row- crops) such as maize and soya-beans targeting commercial farmers and Weather Index (Drought) insurance for grouped small scale farmers. 

The weather index (Ruzhowa/Uthango) protects your investments (inputs) in the event of a drought. It’s a special product for small holder farmers as they are financially excluded from the traditional agriculture insurance products that are available on the market.

Remember farming is a business and insurance plays a major role in ensuring your success. 

 Written by Nyasha Mutuva 

Old Mutual Insurance Agronomist 


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