Can agricultural insurance shield Uganda’s farmers from El Niño?
KAMPALA, September 1, 2026 — Agricultural insurance in Uganda has reached a significant milestone, with more than one million farmers now covered under the Uganda Agriculture Insurance Scheme [UAIS] through various insurance products, as the country seeks to protect farmers against climate-related risks.
The milestone comes at a critical time. Uganda’s Ministry of Water and Environment [MWE] has warned of an increased likelihood of El Niño conditions during the second half of 2026. The ministry says the phenomenon could bring enhanced rainfall and increase the risk of flooding during the September–December rainy season.
For farmers, the anticipated weather disruption presents a fresh test of Uganda’s agricultural risk-management systems. Flooding, unpredictable rainfall and other extreme weather events can destroy crops and livestock, damage farm infrastructure and ultimately undermine farmers’ ability to repay agricultural loans.
This makes the expansion of the UAIS particularly significant. The scheme has now reached more than one million farmers, with more than Shs 53.8 billion reportedly paid out in claims, highlighting the growing role of insurance in cushioning farmers against losses caused by natural and production-related risks.
The development also has important implications for Savings and Credit Cooperative Organisations [SACCOs] and other financial institutions that are increasingly financing agricultural activities. When climate shocks destroy a farmer’s crops, livestock or farm infrastructure, the resulting losses affect not only household incomes but also the farmer’s ability to service loans.
The emerging question, therefore, is whether more SACCOs should integrate agricultural insurance into their lending products.
John Makosya, Chief Operations and Impact Officer at Agro Consortium Uganda Limited [AIC], has challenged SACCOs across the country to consider insuring agricultural loans issued to their members, arguing that insurance can protect both farmers and financial institutions against risks associated with agricultural production.
The climate warning from the MWE also makes the issue more urgent for farmers and decision-makers in the insurance and financial sectors. If El Niño brings the forecast wetter-than-normal conditions, are Uganda’s farmers, SACCOs and insurers adequately prepared?
Growing agricultural insurance coverage
The UAIS is a public-private partnership [PPP] launched in the 2016/17 financial year to help farmers manage losses arising from adverse weather, pests, diseases, fires and other agricultural risks.
According to AIC, the implementing partner for the scheme, the programme has now reached more than one million farmers and paid out more than Shs 53.8 billion in claims to farmers who suffered insured losses.
The growth is significant considering that the UAIS began with about 26,000 farmers. Makosya says approximately 95 percent of the farmers currently insured under the scheme are smallholders, suggesting that agricultural insurance is increasingly reaching farmers who have traditionally had limited access to formal risk-management mechanisms.
Government has sought to make agricultural insurance more affordable through premium subsidies. Under the scheme, the Government provides an annual Shs 5 billion premium subsidy, with small-scale farmers receiving a 50 percent subsidy and large-scale farmers receiving 30 percent. Farmers in disaster-prone areas can receive subsidies of up to 80 percent.
Earlier government performance data illustrates how rapidly the UAIS has expanded. By September 2024, 885,623 farmers had been insured against a target of 500,000 for the financial year. The scheme had also insured agricultural loans worth Shs 2.47 trillion, while agricultural insurance premiums had reached Shs 125.7 billion.
The same government report indicates that cumulative claims paid to farmers from the beginning of the scheme in 2016/17 to September 2024 had reached Shs 52.492 billion. Claims increased from Shs 9 billion in 2021/22 to Shs 13.582 billion in 2023/24, a trend the Government associates with increasing climate, pest and disease risks affecting agricultural production.
For Uganda’s largely agriculture-dependent economy, the expansion of agricultural insurance comes amid growing concerns about droughts, unpredictable rainfall, floods, pests and diseases.
A role for SACCOs
Speaking to theCooperator recently, Makosya said farmers and cooperatives should view insurance as an essential risk-management tool rather than waiting until disaster strikes.
He urged SACCOs to consider insuring agricultural loans extended to their members, noting that financial institutions could use insurance to reduce the risks associated with lending to the agricultural sector.
“What is stopping the SACCOs from insuring those loans they are giving to their members?” Makosya asked.
He added that SACCOs could also support farmers to insure the expected yields from their agricultural investments.
Makosya further noted that the scheme is increasingly using technology to make agricultural insurance more accessible and efficient.
“Satellite data, GPS mapping and weather information are being used to monitor farms and assess agricultural conditions, reducing the need for costly physical inspections, particularly for smallholder farmers,” he said.
“The scheme currently covers a wide range of enterprises, including crops, livestock, poultry, fish farming and other agricultural activities. Farmers are compensated when insured losses occur, helping them rebuild their farms and maintain their livelihoods.”
Room for further growth
Despite the progress, the figures suggest that the sector still has considerable room for expansion.
The Insurance Regulatory Authority’s 2024 market report recorded 106,374 agricultural insurance policies, with a total sum insured of approximately Shs 825.7 billion.
While the figures differ because they reflect different measurements and reporting periods, together they highlight the growing importance of agricultural insurance as Uganda seeks to protect farmers, sustain agricultural investment and strengthen access to finance.
For producer cooperatives and SACCOs, the emerging challenge is whether they can increasingly integrate insurance into agricultural lending and member services, helping farmers remain financially resilient when climate and production shocks occur.
As Uganda prepares for the possibility of El Niño-related heavy rains and flooding, agricultural insurance could become an increasingly important line of defence. However, the key question remains whether insurance coverage can expand quickly enough to protect the millions of farmers whose livelihoods remain highly vulnerable to climate shocks.
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