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Edgar Vhera Agriculture Specialist Writer

STAKEHOLDERS in the agriculture industry have challenged insurance companies to educate farmers on the need to insure their enterprises against risks and prove their capacity to deliver on contractual obligations to gain their trust.

The call comes on the backdrop of reports that insurance uptake was as low as three percent for smallholder farmers in Zimbabwe and less than 20 percent globally owing to a number of issues, key among them the absence of trust between farmers and insurers.

Nearer home, insurance policies are at the moment a necessity, thanks to the incessant rains currently pounding the country threatening to trigger flash floods that can destroy crops and livestock.

Zimbabwe Farmers Union (ZFU) secretary general Mr Paul Zakariya yesterday observed that most agriculture production in the country was rain-fed with incidences of hailstorms and flash floods getting common by the day. He said many smallholder farmers were reluctant to take up insurance packages because they did not the benefit of doing so.

“Farmers must take crop and livestock insurance as an investment into their production activities. Currently, no insurance products suit smallholder farmers in terms of pricing. As agriculture income is low and seasonal, it will be folly to expect farmers to take insurance packages that require a monthly subscription.

“Large-scale farmers who used to take up insurances also encountered payment challenges and have since lost trust with insurers. Some contractors deduct insurance money without forwarding the same to the insurers. It is only when disaster strikes that the farmers will be told that they are not insured and hence can’t claim anything,” added Mr Zakariya.

He bemoaned the growing incidences in which contractors deduct money from uninsured farmers’ earnings through stop-order systems purporting to be reclaiming their dues.

However, Mr Zakariya stressed the importance of taking up insurance saying it was a critical investment for agriculture and development if done properly.

“Farmers who have a bankable agriculture projects can use their insurance guarantees to access finance,” he said.

Tobacco Farmers Union Trust (TFUT) vice president Mr Edward Dune added his voice saying nasty experiences at the hands of insurers in the past had given farmers a negative attitude towards agricultural insurance.

“Unfortunate experiences at the hands of bogus insurers have left farmers doubting the relevance of insurance policies. They took up policies that were never honoured in the case of calamities. So, we can’t blame them for not taking up insurance because of that history and the insurance industry must prove otherwise,” said Mr Dune.

He observed that contracted farmers, for instance, were giving meaningful business to insurers hence the need insurance companies to honour their obligations in case of calamities.

Zimbabwe Indigenous Commercial Farmers Union (ZICFU) president Mrs Mayiwepi Jiti concurred that farmers had challenges in trying to access claims after disasters.

“Experience is the best teacher. In the past farmers had hard times trying to get compensation after disasters with policies sometimes failing to cover natural disasters. In some cases, farmers were short-changed after getting less than the agreed percentages upon claim while some got nothing because of lack of knowledge.

“This has been a big disappointment resulting in lack of trust in insurances and huge losses for farmers,” said Mrs Jiti.

In a positive development, Pula Advisory and AFC Bank working with the Government piloted the area yield index insurance for some Pfumvudza/Intwasa farmers in Rushinga and Mwenezi districts and paid US$123 903 who had experienced crop failure last year.

The insurance index used a pre-determined and agreed yield level in specific micro-ecological zones and compensated farmers the agreed percentage of the loss below pre-determined yield level based on production systems, micro-ecological zone attributes and history of the farmers.

De-risking agriculture production will allow farmers to receive some form of payment in the event of crop and livestock failure due to natural problems such as drought, dry spells, windstorms, frost, hailstorms, floods, pests and diseases among others.