In Rwanda, like elsewhere, agriculture is a crucial sector. Two-thirds of the population is dependent on agriculture as the main source of livelihood with over 80 per cent of the farming community described as small scale farmers.
These farmers are particularly at risk of vagaries of weather. Even worse, the agricultural sector suffers from low levels of investments due to fear by lenders of the risk involved mainly due to changes in the weather conditions.
Hence, the Ministry of Agriculture's recent launch of a farmers' insurance scheme dubbed Hinga Urishingiwe in collaboration with Syngenta Foundation for Sustainable Development among others, could not have come at a better time. This reasonably priced agriculture insurance scheme, though on a pilot basis, will clearly play an important role in supporting farmers to manage the losses incurred during droughts.
It is generally gratifying that the initiative has been welcomed with such open hands with 20,000 farmers from the Southern and Western Provinces already covered. And the fact that the farmers have only to pay an annual premium of Rwf1,000 per year is not just an incentive but too little a price to pay considering the risks involved. In any case, when a farmer removes nearly the whole of this risk and guarantees himself a profit, it's not a bad business decision.
One of the conditions of the new insurance scheme is for insured farmers to respect or fulfill the required obligations regarding the right farming practices. Hence, before the ministry of Agriculture and its partners roll out the project countrywide, there is need to educate all farmers about the true value of the scheme and its parameters, among others, in order to eliminate any lingering doubt.
The scheme will certainly work for farmers if there is sustained demand for it, which hinges on the level of awareness. If they overestimate the value of the scheme, they will be disillusioned; if they underrate it, they are unlikely to adopt it.