DFID Project Trials Sorghum Insurance to Support Climate-Resilient Farming in Kenya

January 29, 2018

The Finance Innovation for Climate Change Fund (FICCF) recently piloted an insurance programme for sorghum farmers in Kenya. Relatively new to Kenya as a commercially grown commodity, sorghum is proving to be more climate-resilient than maize because it is naturally drought- and heat-tolerant. The FICCF, accordingly, is working with farmers to encourage uptake of the new crop.

The FICCF is managed by the U.K. Department for International Development’s Strengthening Adaptation and Resilience to Climate Change in Kenya Plus (StARCK+) programme.

The FICCF insurance package includes:

• Weather index coverage to pay out in the event of drought during the development of the sorghum plant or harmfully heavy rainfall as the harvest approaches; and
• “Multi-peril” coverage to address the risk from birds, armyworm, and other threats.

Of the 2,000 or so sorghum farmers currently working with StARCK+, 156 were willing to take out the policy through APA insurance during their first season. They insured the crop for its full output value and paid a premium equivalent to 10 percent of that value. In the pilot, participating farmers paid 50 percent of the policy premium and FICCF paid the other 50 percent. Of the 156 participants, 55 received compensation for crop losses.

Watch the video to learn more:

The FICCF team will conduct research with the farmers in January to assess the trial and better understand their perceptions of this kind of insurance.

In addition to its work in crop insurance, the FICCF has been on-lending climate finance through microfinance institutions to smallholder farmers involved in the sorghum, cassava, dairy, and indigenous chicken sectors. The microcredit is combined with a package of assistance aimed at de-risking production and increasing the overall resilience of the farmer. Partners include microfinance bank Rafiki and an agribusiness, Transu Ltd.

Thanks to this credit, more than 2,000 farmers have accessed products or services such as land preparation, improved seed, fertilizer, mechanized thrashing, and better storage bags. Transu’s role is important because by aggregating the produce for delivery to food processing companies and breweries, it provides a reliable market for the smallholders.

StARCK+ has also helped develop downscaled weather advisories-delivered via mobile text message-to advise farmers on the most advantageous planting period, and has provided technical assistance to improve sorghum production practices and encourage intercropping, which increases soil cover, improves nutrient absorption, and boosts income from the land.