The number of smallholder farmers in Uganda accessing insurance services against agricultural risks has gone up by over 30 per cent between the year 2021 and 2022.
According to the data from Agro Consortium Uganda Limited, a coalition of 13 insurance companies, the number of farmers getting insurance to protect their produce against risks increased from 259,224 in June 2021 to 375,640 last year meaning more farmers are getting protected against insurable risks.
The data also indicated that the uptake of agricultural insurance grew by 116,416 policies for the period ended June 2022 showing increased confidence by underwriters in one of the riskiest sectors.
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The Uganda Agriculture Insurance Scheme which was started in July 1, 2016 has registered increasing number of beneficiaries comprising both the smallholders and commercial farmers, though the majority of the beneficiaries are the smallholders farmers.
“The general objective of the scheme is to ensure that Ugandan farmers are largely protected against the effects of agriculture risks,” said John Bosco Bakashaba, an official from Agro Consortium Uganda Limited.
Loans under insurance and written premiums
Other areas of growth, the data indicated includes the amount of loans under insurance and written premiums whereby insured loans grew from Shs900b in June 2021 to Shs1.38 trillion last year.
On the other hand, gross written premiums under agriculture increased from Shs42.9 to Shs70 billion.
According to Munyaradzi Daka, Agro Consortium technical lead, the scheme will continue offering standardised and subsidised agriculture insurance services, as well as mitigating financial losses suffered due to natural calamities.
“In this,” said Daka, “we seek to increase access to credit by farmers through ensuring that financial institutions are confident that they can be protected them from losing their lent to the agriculture sector in case of eventualities.
The scheme also seeks to identify insurable risks as well as creating packages that are affordable to farmers.
Under the scheme, the government, like all other countries subsidizes agriculture insurance premiums to make it affordable and also encourage farmers take up agriculture insurance whereby small-scale farmers get 50 percent subsidy, large-scale farmers 30 percent and farmers in severe disaster-prone areas get 80 percent, farmers under the Parish Development Model (70 percent).
Agriculture which is the back-borne of Uganda, employs more than 75 percent of the population, contributes 24.1 per cent towards the country’s GDP and 33 per cent of export earnings in FY 2021/22, according to the International Trade Administration.
Thus the Ugandan government will continue to support the agriculture sector by designing and implementing a number of programmes directed towards improving the lives of the out-growers.
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Uganda produces a wide range of agricultural products such as coffee, tea, sugar, livestock, fish, edible oils, cotton, tobacco, plantains, corn, beans, cassava, sweet potatoes, millet, sorghum, and groundnuts.
For instance, Uganda is Africa’s leading coffee exporter and second largest producer but sends just 5.7 per cent of its exports to the United States.