Insurance for smallholder farmers in the offing: Ipec

MOST smallholder farmers in Zimbabwe rely on rain-fed agriculture, yet agricultural seasons have become more unpredictable due to the impact of climate change.

e country is vulnerable to climate-related risks, such as extreme weather events ranging from drought, floods, excessive rainfall to heat waves. As a result, smallholder farmers regularly suffer losses.

To help smallholder farmers withstand these unforeseen events, the Insurance and Pensions Commission (Ipec) has partnered with the International Finance Corporation (IFC), an arm of the World Bank, to conduct a feasibility study on agricultural index-based insurance in Zimbabwe.

Agricultural index-based insurance has helped smallholder farmers in other countries, including on the African continent, to recover from climate-induced losses.

e partnership under the banner, Agriculture Insurance Support Project, will see IFC conducting a feasibility study on agricultural insurance, help Ipec to develop the regulatory framework for agricultural insurance, and facilitate knowledge exchange to help Zimbabwe’s insurance providers learn best practices from more developed agri-insurance markets.

e objective is to develop an insurance solution to protect smallholder farmers from weather-related crop damage and other shocks.

Commenting on the partnership between Ipec and IFC, Ipec commissioner Grace Muradzikwa said: “One of our key roles as the regulator is to develop the insurance sector in Zimbabwe.

is partnership has, therefore, come at an opportune time given that the country is prone to climate change-related risks, including extreme weather events.”

On his part, IFC’s country manager for Zimbabwe, Adamou Labara said: “Agriculture is central to Zimbabwe’s economy, but it is a risky endeavour that is becoming riskier as weather patterns become less predictable.

“IFC’s partnership with Ipec will reduce the risks for Zimbabwe’s farmers by developing the foundation of agriculture insurance in the country. Supporting the agribusiness sector is an important part of IFC’s strategy to promote private sector growth across Africa.”

Meanwhile, Ipec is participating in the Inclusive Insurance Innovation Lab coordinated by Access to Insurance Initiative whose objective is to enhance access to agricultural insurance for smallholder farmers.