Agriculture is the backbone of Kenya’s economy, employing over 70 per cent of the rural population and contributing significantly to the country’s gross domestic product (GDP).
However, the sector is increasingly vulnerable to unpredictable weather patterns, pest outbreaks, and disease, worsened by climate change.
As a result, crop and animal insurance has become an essential tool to protect farmers from devastating losses and ensure the sustainability of agricultural livelihoods.
Understanding crop and animal insurance
Crop and animal insurance, also known as agricultural insurance, provides financial protection to farmers against specific risks that may lead to partial or total loss of crops or livestock.
In Kenya, this insurance is offered by several insurance companies, often in collaboration with the government and development partners.
Crop insurance typically covers losses resulting from drought, excessive rainfall, floods, pests, and diseases. For instance, if a farmer plants maize and the crop fails due to prolonged drought, the insurance will compensate them for the loss.
The compensation is per the agreed terms and conditions under the policy schedule and policy document, which the insurer and the insured have agreed upon.
Livestock or animal insurance covers risks such as diseases, accidents, drought-related deaths and theft. In arid and semi-arid areas like Turkana and Garissa, livestock is a key source of income, and the loss of animals due to drought or disease can wipe out an entire household’s livelihood.
The impact of climate change
Climate change has significantly altered the agricultural landscape in Kenya. Rainfall patterns have become increasingly erratic, with prolonged droughts and unexpected floods becoming more common.
The once predictable planting seasons are now uncertain, and farmers often struggle to make timely decisions about when and what to plant. These climate-related challenges have led to lower yields, increased crop failure, and higher livestock mortality.
The 2020–2023 period, for example, saw Kenya experience its worst drought in four decades, affecting over four million people, most of whom depend on farming and pastoralism. Such events highlight the urgent need for risk mitigation tools like crop and animal insurance.
Benefits of crop and animal insurance
- Risk mitigation: Insurance reduces the financial burden on farmers when natural disasters strike. This encourages more investment in farming, knowing there is a safety net.
- Access to credit: Many banks and microfinance institutions are more willing to lend to insured farmers, increasing access to capital for agricultural development.
- Improved resilience: Insurance allows farmers to recover quickly after losses, enabling them to continue farming without being driven into poverty.
- Encourages innovation: With protection in place, farmers are more likely to adopt modern farming techniques, high-yield seeds, or improved livestock breeds.
- Food Security: By stabilising farmer incomes, insurance contributes to more consistent food production, ultimately boosting food security at both household and national levels.
Government and private sector initiatives
The government, through the Ministry of Agriculture, has partnered with insurers and donors to roll out programmes such as the Kenya Livestock Insurance Program and Crop Insurance Subsidy Programmes.
These initiatives aim to make agricultural insurance more accessible and affordable, especially to smallholder farmers.
Conclusion
As climate change continues to threaten food production in Kenya, crop and animal insurance is no longer a luxury but a necessity. By cushioning farmers from losses and promoting long-term resilience, this insurance plays a critical role in safeguarding livelihoods and ensuring the stability of the nation’s food systems.
The writer is an insurance expert.
