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Farmers Encouraged To Take Up Agricultural Insurance

AMURU - Leaders of Kweyo Growers Cooperative Society are encouraging their members to take up agricultural insurance, to save them losses resulting from risks such as pests, diseases, and drought among others.

In the 2016/2017 financial year, the government of Uganda launched a Shs 5 billion Agriculture Insurance Premium grant to boost the acceptance of agricultural insurance policies among crop and animal farmers in Uganda.

The 10 insurance firms working with the government to insure the loans and help farmers neutralize losses from these threats include; Lion Insurance, APA, Gold Star Insurance, Pax Insurance, Phoenix Insurance and Jubilee Insurance among others.

The policy urges commercial banks to lend to both small and large-scale farmers of national priority crops and livestock. The loans given to farmers are protected from the effects of agricultural risks and natural disasters which farmers have little or no control over.

However, many agricultural cooperatives in northern Uganda have not taken advantage of the insurance scheme.

Laruni Filder, the General Secretary of Kweyo Growers Cooperative Society Limited in Ongako Sub County, Omoro district, said that agricultural insurance uptake at the cooperative is still at zero percent.

According to Laruni, farmers complain even when asked to pay a low amount like Shs 10,000 to save their crops.

“We are still trying to sensitize the members because they think the losses must occur after they have paid money for it. But we are telling them that paying Shs 10,000 is better than losing more when the risks occur when you haven’t paid and can’t be compensated,” Laruni said.

Laruni revealed that she bought the idea of agricultural insurance, but she is yet to practice it. She also said changing the mindset of people about insuring their farm is a hurdle, because many of them plant on little farms owned communally, so they see no need to spend money in the name of insurance.

Besides, many do not know the exact quantity of harvest per acre. “When people plant an acre of groundnuts and reap four bags, they think that is fair yet, they could get more. And now the prolonged dry spell is affecting people’s crop gardens, but they don’t foresee it. This is where the insurance will help,” she said.

Okumu Bernard, the Omoro District Commercial Officer, said he is not aware of any cooperative in the district that has embraced agricultural insurance.

“I don’t even know of any company that is doing it. If there are farmers that have insured their crops then I’m not aware of it,” Okumu said.

A 2019 study by the Economic Policy Research Centre shows that northern Uganda has the lowest uptake of agriculture insurance with slightly 7,000 farmers, which is equivalent to only 10.5 percent insuring their crops.

Oceng James, the Manager of Kweyo Growers Cooperative said they plan to insure their crops next season to prevent the risks associated with farming.

The more than 400-member cooperative majors in growing groundnuts, which they later process to peanut butter. Although the cooperative has been relying on out growers for their groundnut stocks due to limited land; they recently leased 50 acres of land in Purongo Sub County, to start massive production themselves, hence the need for the crop insurance.

“Farming has a lot of things at stake, so one of the things we are looking into is to have crop insurance,” Oceng said.

Oceng said the cooperative leaders have started talking to the members to embrace the scheme, which we will be paying at only 2 percent premium, instead of 10 percent. This, he said, will prevent heavy losses that result from unpreventable causes such as harsh weather.

“The government is subsidizing crop insurance, so we are talking to our members to look at it as something they can do. The insurance is yours and sometimes even when you don’t claim it, you are paid because they have looked at how the yields have been affected by the weather,” he said.

An agricultural risk assessment study done in 2015 shows that Uganda loses between $ 606 million to $ 804 million per year due to pests and diseases in crops and animals, post-harvest loses and drought and price fluctuations.

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