Following a successful pilot phase for the new insurance scheme developed by UAP in conjunction with the Syngenta Foundation, Kenyan farmers will be able to purchase insurance against the effects of drought and excessive rain.

The program is the first of its kind. Here are more details:

Under the novel system, farmers register their purchases by sending an SMS to a phone number provided by UAP. The weather stations then monitor the weather and inform the insurance company of impending crop failure and subsequent compensation. Each farmer is then informed via SMS about the payouts. Costs are kept down through the use of automated weather stations which avoid the need for expensive field visits to farms to ascertain risk and loss.   This makes the insurance feasible for both the farmer and the insurance company.

The first pay-out to farmers affected by drought happened in Nanyuki last week. UAP Head of Marketing and Distribution Joseph Kamiri said that the company had developed the product in response to a great need identified while developing agriculture insurance products for the Kenyan market in conjunction with the Syngenta Foundation.

The early success of the programme has given it the go-ahead to be released across the country in 2010, said Rose Goslinga, insurance coordinator of the Syngenta Foundation for Sustainable Agriculture in Kenya:

Traditionally, smallholder farmers have been totally dependent on the vagaries of weather. In times of drought they lost their crops and their investment in seed and fertilizer.  To make matters worse, farmers then had to pay for a second lot of seed to enable them to replant. But because they had not obtained a crop, they had little money, if any, to repurchase the seed.

In recent months, Kenya has been hit by severe drought, so this new programme will likely go a long ways toward helping impacted farmers get back on their feet.