Insuring Ghana's Smallholder Farmers Against the Weather

Tamale — Smallholder farmer Suleman Mustapha Simbia, 40, is pleased with the introduction of an insurance initiative called the Ghana Agriculture Insurance Programme.

The programme is being implemented in this West African nation to help farmers who had been suffering from loss of income as a result of the bad weather conditions that affect their yields. "I no longer think of losing my yield due to the low or high rainfall. My confidence and love for farming has grown. And this year, I have increased the number of acreages I cultivate from 1.2 to 2.4 hectares," he told IPS.

The system is fairly straightforward. A farmer pays one-tenth of the total cost of their crops at the beginning of the farming season to GAIP. And if there is no rain for 12 consecutive days, the system triggers a payout.

This is the second year of its operation, and to date a total of 136 smallholder farmers received payouts on claims from the Ghana Agriculture Insurance Programme (GAIP) because of the drought in northern Ghana.

While no exact figures are available for how much was paid out, the programme pays farmers depending on the size of their land and the amount they invested in inputs. On average, farmers who invest 150 dollars in inputs for half a hectare of land could be paid out between 200 to 300 dollars, depending on how severely they were affected by the weather.

But the scheme is dependent on automatic weather stations (AWS). AWS is a map-based system that records daily climatic data including wind, rainfall, relative humidity and temperature. The insurance programme uses data from AWS to ascertain when farmers are affected by the weather, and payouts are made based on this data.

Agro meteorologist at GAIP Evelyn Debrah told IPS that the programme benefits farmers by protecting them from the cost of production during extreme weather patterns and allows them to remain in production following the disaster.

"For example, if there are more than 12 consecutive dry days (less than 2.5 mm of rain) within 20 km of a GMet weather station, it will automatically trigger a payout to policy holders," she said.

The initiative is funded by the German government under the Innovative Insurance Products for the Adaptation to Climate Change project. It is implemented through a public private partnership between the National Insurance Commission, the Ghana Insurance Association and theGerman Agency for International Cooperation (GIZ).