“When my cow unexpectedly died, I mourned as if it were my relative. Every time I think about its death, I choke on tears. If only I had insurance, I kept thinking. Then I would have gotten another one without struggle,” says Victoria Mukamana, a smallholder farmer from Mwurire sector, Rwamagana district in Eastern province of Rwanda. Her daily life, basic needs and household growth depend on livestock activities as her main source of income. Victoria’s cow valued at Rwf 400,000 (USD 515.82) died in a mysterious accident in 2014. It had escaped from her enclosed farm, fell into a deep hole, and immediately died.
Livestock insurance helps smallholder farmers manage the unpredictable risks they face.
With insurance, part of the risk of accidental death of the cow is transferred to another party. When farmers suffer a loss, they can claim financial support from their insurer to mitigate part of the loss. This helps them bounce back in the event of unforeseeable circumstance such as happened to Victoria.
In 2015, Victoria met ACRE Africa staff when supplying milk at the milk center owned by a cooperative called Dukunde Amatungo in the Eastern Province. The ACRE Africa team was training the members of the cooperative who were taking loans to buy livestock together with insurance, which is compulsory. When Victoria learned about the benefits of insurance, she was excited to learn that there was a way to protect herself from a similar situation such as happened in 2014.
With a loan from Dukunde Amatungo Cooperative, a farmer cooperative from Rwamagana district, Victoria purchased a new cow worth Rwf 450,000 (USD 580.30). She took an insurance cover through ACRE Africa and paid a sum premium of Rwf 18,500 (USD 23.85). The cow brings in ten liters of milk per day. She sells one liter of milk for Rwf 200, making a sum of Rwf 2000 (USD 2.58) per day; and a total of Rwf 60,000 (USD 77.36) per month. If something happened to her cow, she would lose an annual income of Rwf 720,000 (USD 928.37), which is 60% more than the value of her cow. However, with insurance, she is assured that there will be no loss of income.
The goal of the insurance product provided by ACRE Africa is to provide a safety net so farmers are confident to invest in and take care of quality animals that will in turn produce milk for sale or for home consumption to improve child nutrition.