Del.icio.us  Digg  facebook  MySpace  Twitter  Google  Bookmark Me  LinkedIn  StumbleUpon  Permalink

African Farmers Beat Drought With Cell Phones

A novel project in Kenya helps smallholders deal with weather risks. Run by the Syngenta Foundation, the program uses mobile phones to offer affordable crop insurance to people who have small farming operations. The project was explained at the World Food Prize annual symposium last week in Des Moines.
 
"One of the many brakes on agriculture in developing countries in Africa and elsewhere is smallholders' reluctance to invest in better seed and fertilizer", says Marco Ferroni, executive director of the Syngenta Foundation for Sustainable Agriculture. Only about half of Kenya's farmers buy improved seed or other inputs. Many use poor-quality seed from previous harvests. "This is because drought or flooding can easily destroy their crops and wipe out the benefits of modern inputs", explains Ferroni. "Not using the best products, however, keeps yields far below their full potential."
 

Making insurance affordable to the small and poorer farmers

"Insurance should be simple, affordable and relevant to small farmers", declares the foundation's local project coordinator Rose Goslinga. With Kilimo Salama, smallholders can insure selected farm inputs at their local retailer and pay half the premium. "Customers are registered using a camera-phone to scan a bar code on each input sold," Goslinga explains. "Most Kenyan smallholders have a cell phone, so our insurance partner sends all policy confirmations via text messaging. That is very quick and inexpensive."
 
To make the insurance affordable, Kilimo Salama's agribusiness partners pay half of the premium. In the 2009 pilot phase, those partners were Syngenta and the fertilizer company MEA. "Their involvement enabled the project to get underway quickly, in time for the next growing season," says Goslinga. "We are adding more agribusiness partners and insured products as the initiative progresses."

To monitor the insurance, the foundation has set up automated weather stations. If a station reports that the season's local rainfall has been insufficient, farmers in the affected area receive a payout. This operates via a money transfer service run by Kilimo Salama's telecommunications partner Safaricom. Using weather station data rather than field assessments further contributes to keeping costs down. Payout via phones avoids middlemen and cash transport to remote areas.
 
"Kenyan farmers traditionally mistrust insurance, in all walks of life", says Goslinga, who knows only too well. "Kilimo Salama participants in our first pilot in central Kenya were initially skeptical. However, they have become real ambassadors for this type of business arrangement, encouraging their neighbors and relatives to join in."

Skeptical farmers change their views on using crop insurance

In the pilot phase Kilimo Salama insured 200 corn farmers. And the year 2009 brought Kenya's worst drought in decades. The smallholder farmers immediately experienced the benefits of crop insurance as they received compensation. This was a new experience, and greatly helped reduce mistrust.

"In 2010, the Syngenta Foundation has expanded the project across five regions", says Ferroni. "This year, some 12,000 small corn farmers have chosen to insure their inputs against drought and excess rain. We now plan to expand into Eastern Kenya in 2011, and to reach all the key farming areas by 2012."
 
What is the Syngenta Foundation for Sustainable Agriculture? This foundation creates value for smallholders in developing countries through innovation in sustainable agriculture and the activation of value chains, he says. The foundation runs projects in Africa, Asia and Latin America, working with a wide range of partners. These include the public sector, private companies, universities and NGOs or non-governmental organizations.

The foundation is based in Switzerland. It was established in 2001 as an independent legal entity by the global agribusiness firm Syngenta. Further information is available at www.syngentafoundation.org.