Mobile phones bring
insurance to Kenyan farmers
Kenyan farmers can now insure some of the costs of
growing crops against bad weather by using mobile phone
technology that links solar-powered weather stations to
an insurance company.
Farmers can cover the cost of seeds, fertilisers and
pesticides at local agricultural supply shops by paying
an extra 5 percent of their value. If their harvest
fails due to bad weather they are reimbursed and can
For now, the policy only covers wheat and maize and is
available for the agricultural inputs of Syngenta and
two Kenyan partners supplying seeds and fertilizer not
sold by the Swiss agrochemicals company. The companies
in turn subsidise some of the insurance costs.
“Last year, when I took out the insurance policy, we had
a total crop failure. The crop didn't even reach the
flowering state, it dried up,” said Jane Gathoni Simon,
a maize farmer who took part in a pilot programme last
“But at the end of the year we were compensated. I
managed to get the (replacement) seeds in time and
Food prices rocketed in much of east Africa in 2008 and
2009 after a succession of failed rains hit staple crops
such as maize. The region is now being deluged by above
normal rainfall, causing widespread flooding in many
On purchase, dealers use a camera phone to scan a
barcode that automatically registers the policy with
Kenyan insurance provider UAP over Safaricom's mobile
Confirmation of the policy is then sent to the farmer on
his mobile phone via a short text message.
Safaricom, 40 percent owned by Britain's Vodafone, is
the leading mobile provider in eastAfrica's biggest
economy with nearly 15 million subscribers at the end of
LOST WITHOUT RAIN
The local climate is monitored by 30 solar-powered
weather stations that transmit rainfall, sun
radiation, temperature and wind data every 15
minutes over the mobile data network.
In the case of drought or excessive rains,
registered farmers automatically receive insurance
payouts through M-Pesa, Safaricom's successful
mobile money transfer service.
Some 9,000 farmers have signed up for the insurance
and 100 more are joining daily, said Rose Goslinga,
project leader from the Sygenta Foundation for
“The main problem that farmers face in the end is
the weather, it's the one thing they can't control,”
“They can do all the things that have been taught by
agronomists, but if it doesn't rain, they are lost.
With these weather stations, with insurance, they
get an option to do something about their fate.”
However, the new crop insurance known as Kilimo
Salama — Swahili for safe farming — covers only
variability of rain and not crop failure due to
pests or disease.
James Wambugu, UAP Insurance executive director,
said technology is making insurance more accessible
in a country where only 6 percent of adults have any
form of protection.
“By harnessing technologies like M-Pesa and weather
stations, our costs are low and we are able to bring
down the cost of the insurance,” he said.
The ease of information transfer is largely due to
Kenya's rapidly growing mobile sector which is the
benchmark for the region both in terms of
penetration and innovation.
“A lot of our subscribers are in very remote places,
so by paying insurance premiums and payouts through
the mobile phone, we cut out one to three months of
travel in one or two mobile transactions,” says
Wadzanai Chiota, head of value-added services at
The Eldoret project is not the first attempt at
using technology to bring insurance to rural
In January, the International Livestock Research
Institute set up a pilot insurance programme for
pastoralists that uses satellite imagery to document
potentially lethal losses of the grasses and
shrubbery the livestock relies on.
At the moment, UAP's insurance is limited to areas
that are near one of the 30 weather stations in the
fertile Rift Valley. Designers of the project are
aiming for 500 stations inKenya with hopes of
reaching as many as 50,000 farmers by 2012.
But not all farmers are fully convinced.
Ezekiel Rop harvested only two bags of maize per
acre in 2009 after the devastating drought, instead
of the usual 15-20.
He had to sell some cows and depend on relief food
to get by.
“I've heard about insurance for farmers, but I've
not considered it,” he said. “I want to understand
it before I buy it.”
Courtesy: The NATION