9 November 2017

Rwanda: Farmers Welcome New Agric Insurance Scheme

Farmers have welcomed the new insurance scheme launched by the Ministry of Agriculture and Animal Resources. Farmers that talked to this newspaper said the new scheme will help improve the sector and make it more competitive.

The national agriculture insurance scheme will enable farmers to benefit from a subsidised agro-insurance cover, according to Dr Theogene Rutagwenda, the director general for livestock and animal resources at the ministry.

The official said the project, currently in the pilot phase, will be implemented in partnership with insurance companies, enabling farmers to acquire policies to safeguard their agriculture activities against various risks like natural disasters and diseases.

The first phase of the scheme was launched last week and will focus on the livestock sub-sector before being rolled out to major cash and food crops, according to Rutagwenda. It is supported by Access to Finance Rwanda as technical advisors.

New dawn

The agro-insurance scheme has raised hopes among farmers, with many saying it will help increase confidence among the banking industry to start financing secured farmers and thus increasing production and competitiveness of the sector.

The farmers say the scheme will help de-risk the sector and make it attractive to new investors and other stakeholders, including credit institutions and spur production and hence farmer incomes.

Jean Claude Shirimpumu, a farmer in Gicumbi District, said the agro-insurance scheme will boost farmer morale and enhance confidence of financial institutions to fund the sector and support its development.

"This will enable farmers to secure the necessary funds to improve livestock farming besides safeguarding farmer investments against losses."

Ayandev Saha, the KMD Reinsurance Brokers general manager, said challenges like disease outbreaks and weather vagaries make it hard for banks to support the sector.

"Therefore, by introducing this insurance scheme, farmers will stand high chances of securing the much-needed capital to improve their activities and increase production," he said.

The livestock sub-sector is an important source of income and food for many households. It is estimated that more than 68 per cent of Rwandan households are engaged in some form of livestock farming. For instance, a total of 248,566 cows had been distributed to poor households by June last year under the One Cow per Poor Family programme, commonly known as Girinka.

The agriculture sector contributes more than 30 per cent to the country's GDP and employs over 72 per cent of the Rwandan population.


Banks have been reluctant to extend credit to the agriculture sector on grounds that the sector is too risky and depends on nature to thrive. This could now, however, change given this new development in the sector.

The overall objective of the scheme is to provide cover that will encourage banks to increase funding to the agriculture sector without raising interest rates.

"The idea is to make effective use of government subsidies through standard insurance contracts," Rutagwenda said. The scheme will benefit farmers working with cooperatives, associations and the various milk collection centres across the country.

How it will work

The agriculture ministry and that of finance and economic planning will draft operational guidelines for the scheme, as well as review and monitor its implementation. The scheme's product structure, in terms of benefits and premium payable and the overall architecture for implementation, must be approved by the National Bank of Rwanda.

The government has over the past decade made significant investments in livestock sub-sector aimed at transforming the sector from subsistence to a commercial-oriented and modern one capable of meeting the country's demand for dairy and meat products.


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