The United Nations Food and Agricultural Organisation’s (FAO) definition of food security says it is achieved when “all people, at all times, have physical, social and economic access to sufficient, safe and nutritious food, which meets their dietary needs and food preferences for an active and healthy life”.

Africa’s food security depends on reliable harvests from smallholder farmers, but erratic weather is making this increasingly risky. For example, in one of the organization’s 2018 report, UNICEF said drought conditions that kicked off in 2017 persisted into 2018 leaving 3.4 million people severely food insecure and an estimated 500,000 people without access to water Read More Here.

Agricultural insurance should be considered one element of a broader risk management approach that becomes even more effective if various risk mitigation elements are put in place. For it to be effective, it will have to be part of a broader package of financial services, including savings, credit and payment systems, knowing that insurance is likely the most complex financial service of them. Combined with other agrarian services, agricultural insurance clearly has the potential to serve as catalyst in transforming smallholder farming. Smallholders’ confidence also has to be built up through products that deliver value and stay in the market.

Another way agriculture insurance works is when bundled with inputs.  Farmers who purchase hybrid seeds suited to their local climate reliably harvest more food. But many farmers are understandably nervous to spend money on high-quality seed if they fear a bad year. When farmers are confident of crop insurance coverage, they are more willing to try modern farming methods—a key to bigger harvests.

If complementing, not replacing, many other elements of good agricultural practise, agricultural insurance can bring much needed security and in the long term, insurance can increase resilience.

- ACRE Africa

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