ZFU calls for training of farmers on insurance
THE Zimbabwe Farmers Union (ZFU) has said there is a need to train farmers on the importance of insurance so that they cover their farming businesses.
Agriculture is a significant contributor to Zimbabwe’s economy, employing almost twothirds of the country’s working population and contributing about eight percent to the Gross Domestic Product (GDP). However, there are limited insurance products in the country specifically designed to protect smallholder farmers.
Commenting on the recent launch of the Zimbabwe Agriculture Index Insurance project, ZFU secretary-general Mr Paul Zakariya told Sunday News Business that not many farmers were aware of the importance of insuring their crops.
“Of all financial services coming from the financial institutions, insurance among smallholder farmers in particular is one not such popular product or service.
“We notice that one of the reasons was that there were no deliberate efforts by the financial institutions particularly insurance companies to develop services that could meet the requirements of smallholder farmers,” said Mr Zakariya.
He said
insurance for farmers was a market that has always been excluded and still is, while as a farmer representative body they have always raised that point.
“You will also realise that the terrain has changed with the land reform programme so the former farmers actually understood the importance of insuring their businesses and farming operations. This is a culture yet to be taken up by many, while there are some who are actually insuring.”
Mr
Zakariya said a good majority in the region 80 to 85 percent of large-scale commerc i a l farmers were not insured. He said this was the reason why if hail strikes most of the farmers actually
lose out completely and if frost bites the same happens because they would not be having a fall back as they cannot be indemnified.
“So going forward we are working together with insurance companies and other financial institutions. We are actually looking at the need to develop products that will suit the different categories of producers from smallholder farmers in their groups and cooperatives to smallholder in their private companies.”
He said yield cover insurances and indexed insurance which covers the yields of farmers would go a long way to assist farmers if their yield gets destroyed or if any hope of getting any yield is destroyed.
He said insurance would be a fall back for the farmers so that they do not lose out completely.
The Zimbabwe Agriculture Index Insurance project was developed by the Insurance and Pensions Commission (IPEC) and International Finance Corporation (IFC) and targeted at smallholder farmers.
Speaking at the virtual launch last week Tuesday, IPEC Commissioner Dr Grace Muradzikwa said the project is expected to go a long way in raising awareness of the importance of agriculture index insurance as well as the development of the index insurance market in Zimbabwe. She said the scope of the project includes assessment of the risks smallholder farmers face, how they are coping with those risks and gauge their appetite for agricultural insurance.