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By Rishi Raithatha 

Pula Advisors 

In January 2022, Pula and APA Insurance paid out nearly $750,000 in claims to 13,523 smallholder farmers in Kenya. The farmers had been affected by drought that lasted between July and October 2021 in Kwale, Taita Taveta and Kilifi counties in Kenya’s coastal region. On average, each farmer received around $57, having paid less than $11 in premiums at the start of the agricultural season. 

 The farmers’ policy came to an end after crop cutting exercises to determine yields were completed by the end of November 2021. Payouts were made, 45 days after the yield assessment point, allowing farmers to receive funds in their e-wallets in time for the upcoming March 2022 agricultural season.  

 The payout covered farmers under taking part in the government-led Kenya Cereal Enhancement Programme Climate Resilient Agricultural Livelihoods Window (KCEP-CRAL). Supported by the European Union, IFAD and the FAO, the programme had reached over 100,000 farmers by the end of 2021. Funded by the Swedish International Development Co-operation Agency (SIDA), IFAD’s technical assistance programme, INSURED, has been supporting Pula in providing insurance to KCEP-CRAL farmers. 

 For agricultural insurance providers, paying out claims is important. It demonstrates that insurance works and can protect livelihoods – both to those affected and to sceptics. Paying out claims publicly with fanfare is not simply a spectacle, but can help to generate further awareness in of insurance. This is particularly important for smallholder farmers as such public events can create agents – even if informal. 

 Insurance is not a tangible product and can be hard to understand. Buying insurance is similar to purchasing a promise; a promise that you will be compensated should you suffer misfortune. Paying farmers in full and on time helps to build and maintain trust among smallholder farmers that insurers can keep their promises. 

 Pula’s area yield-index insurance product protects smallholder farmers comprehensively against risks such as droughts, floods, pests and diseases. This helps to improve farmer resilience especially in the face of unpredictable rain patterns, frequent droughts and the emergence of new pests. With climate change affecting more farmers every year, Pula also monitors farms using satellite imagery and provides agronomic advisory via SMS. This helps farmers to prepare accordingly and plan on how to maximise their crop yields. 

 What makes Pula and other agricultural insurance providers successful are the partnerships created to deliver insurance to smallholder farmers. Central to this is having the government as one of the main partners. Agriculture remains a vital part of economies across most of Sub-Saharan Africa, enabling the sector to remain a government priority.  

 KCEP-CRAL showcases how a government-backed programme for farmers can work well. 

Farmers under taking part in KCEP-CRAL are typically provided with a bundle of complementary services, notably high-quality inputs, access to market and crop insurance. Uniquely, insurance was identified as one of the key product requirements and was included as a core offering to farmers from the onset. This has contributed to the programme’s success. 

 The payout event held on 27 January 2022 publicly affirmed that agricultural insurance does work – with the right partnership structure in place. Farmers that received claim payouts at the event understood how their premium payments had cushioned them against the impact of climate change, and could continue to protect their future livelihoods. The Government of Kenyan government saw that agricultural productivity could be safeguarded through insurance, while Pula and APA Insurance can hope to benefit from greater awareness and trust.  


 To find out more about Pula’s work, visit our website and sign up for our newsletter. 

Take a look at the INSURED programme’s Insurance Toolkit with technical tools and knowledge briefs for project teams. INSURED is implemented by IFAD through the Platform for Agricultural Risk Management (PARM). 

 This piece was originally posted by Pula on