Farmers reap crop insurance benefits

By Emmanuel Chilemba:

Frank Ipo from Traditional Authority Maseya in Chikwawa District breathed a sigh of relief after he received K103, 000 as crop insurance payout.

This welcome news to the father of four comes after his one-acre farm suffered low yields due to El- Nino related shocks.

The El-Nino weather phenomenon exacerbated the situation in the already sunbaked land during the 2023-24 season.

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“In the said farming season, I bought an insurance premium of K25, 000, having previously experienced significant losses of agricultural production owing to perennial droughts and floods in the district.

“By coincidence, I harvested low yields after dry spells scorched my plants. So, the compensation of K103,000 came as a timely relief, as it has aided me in buying fertiliser and related farm inputs for this current season,” Ipo said.

He said this was not the case before, as such sort of intervention was out of the question.

Climate change-related shocks has been inducing food insecurity in the country, leaving many households destitute.

For instance, recently, El- Nino-related shocks induced food insecurity in the country, with 44 percent of crops damaged, leading to 5.7 million Malawians facing severe hunger.

In such disheartening moments, the crop insurance payouts provide a lifeline, in terms of direct financial support to smallholder farmers, to help offset losses resulting from weather-related challenges such as drought and floods.

This initiative is part of a broader resilience strategy aimed at building sustainable agricultural systems and supporting food security.

Currently, the United Nations World Food Programme (WFP), in partnership with the Ministry of Agriculture and the Adaptation Fund, has commenced the distribution of $1.3 million (about K2.2 billion) in crop insurance payouts to over 36,000 farming households across the country’s eight districts.

The smallholder farmers are among many others who recently bought such premiums, after their crops suffered from El Niño weather-related shocks.

Sam Kawale, the Agriculture Minister, underscored the significance of farmers insuring their crops as climate change takes centre stage.

He noted that climate-related shocks had been inducing food insecurity in the country, as most farmers do not harvest projected stocks of farm produce.

“Malawian farmers are the backbone of our economy but they are also on the frontline facing climate shocks. Crop insurance provides a risk transfer mechanism, offering financial security, among others, through compensation for crop losses, ensuring that farmers recover and continue farming despite facing adverse conditions,” Kawale explained.

He then suggested the need for other farm-related premiums, citing livestock, among others.

“The Ministry of Agriculture puts a lot of value in making sure that every farmer gets maximum yields from their crop production. However, in recent years, we have been experiencing many impacts, in terms of climate change, which has been manifesting in the forms of drought or floods, causing food shortages in the country.

“The ministry is also proactive in making sure that we are putting in place mitigating factors to ensure that our farmers have something at the end of the crop cycle. That’s why, apart from investing in irrigation, we are focusing on crop insurance,” he added.

Simon Dinhere, WFP’s Deputy Country Director, echoed the sentiments.

“As the climate crisis continues to intensify, smallholder farmers are bearing the brunt of its effects.

“This payout is not only critical in providing immediate relief, but is also an important step towards building long-term resilience,” he indicated.

Denhere added that WFP’s partnership with the Ministry of Agriculture in implementing weather-based insurance interventions provides a safety net for the country’s farmers by protecting them from the financial consequences of poor harvests.

“This season’s payout is among the largest in recent years, underscoring the increased severity of climate-related challenges facing the agricultural sector in Malawi,” Denhere pointed out.

Nonetheless, agriculture policy expert Tamani Nkhono Mvula is of the view that the adoption of crop insurance is moving at a snail’s pace among most smallholder farmers in the country.

This, he said, is due to lack of knowledge about what crop insurance entails, the costs of premiums and the complexities involved in buying such premiums.

“If you look at the trend, in terms of which categories the farmers have insured their crops, you will see that the majority of them are those that have insurance through an institution.

“For example, tobacco farmers mostly have insurance through contracts they have with companies. But if you look at the smallholder farmers, most of them have not yet embraced this concept,” Mvula said.

Mvula emphasised the need for the government and other stakeholders to consider incorporating crop insurance aspects as part of extension services.

He is optimistic that such interventions will go a long way in enlightening most smallholder farmers about the significance of insuring their crops amid the country’s persistent weather-related shocks, including droughts and floods.

“The farmers that are on contracts, let’s say, for example, they are in cooperatives and have formed a contract with a company as an off-taker, those companies should be the ones supporting the farmers to get the insurance because I do not think, on their own, farmers have capacity to do that.

“So, let farmers be in cooperatives and let [there] be an agreement with off takers to provide insurance in case of a disaster,” Mvula added.

His remarks echo those of Director of Planning in the Ministry of Natural Resources and Climate Change Hamilton Kamwana, who also said lack of productive farm inputs, including fertiliser, and high illiteracy levels remain some of the barriers.

Kamwana was quoted by The Daily Times last year, when he was presenting a study that focused on barriers to crops insurance among smallholder farmers in Malawi, as saying most farmers consider crop diversification as the top most mitigating strategy against effects of climate change.

“There is a need for the government to introduce a programme through agricultural extension services to sensitise farmers to issues of crop insurance and enhancement of financial literacy,” Kamwana said.