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Scaling Up Weather Index Insurance / Crop Insurance for Small Holder Farmers in Tanzania: The Case of Tanga Region


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Scaling Up Weather Index Insurance / Crop Insurance for Small Holder Farmers in Tanzania: The Case of Tanga Region
Case Study Session
Ms Komba Neema Mutasingwa, RCE Greater Dar Es Salaam
9th African Regional RCE Meeting
5-7 August, 2019, Luyengo, Eswatini

Published in: Government & Nonprofit
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Scaling Up Weather Index Insurance / Crop Insurance for Small Holder Farmers in Tanzania: The Case of Tanga Region

  1. 1. 2019/08/12 1 Scaling up weather index insurance/Crop insurance for small holder farmers in Tanzania The case of Tanga region Introduction • Agriculture is the backbone on the Tanzanian economy • Accounting for half of the national income and slightly more than half of merchandise exports. • More than 80 percent of Tanzanians depend on agriculture as a source of food and employment especially to the rural dwellers (FAO, 2005; World Bank, 2001). • 3.5 million households growing crops only, 2.3 milling growing crops and keeping livestock and nearly 58 thousand households keeping livestock only (National Bureau of Statistics, 2013). • Those who deal with crops play a big role on supplying food to the national (FAO, 2005). Agriculture and women employment • There are over 15 million smallholder farmers in the country, more than half of who are women (Nyomora et al., 2012). • Agriculture comprises a greater part of women‘s economic activity than men‘s: 81% of women, compared to 73% of men, are engaged in agricultural activity. • In rural areas, that number rises to 98% for women (Leavens and Anderson, 2011 Agriculture and youth employment….. • The national unemployment level is estimated at 11.7%. Every year, the education system releases over 800,000 youth into the job market of which at least 10 %( 80,000) complete tertiary education. It is said that, agriculture has the potentials for generating more self employment opportunities to the majority of youth compared to other sectors of the economy. Tanzania government and Agriculture • Agricultural transformation is a pan-Africa development agenda as per African Heads of states 2003 Maputo and 2014 Malabo declarations. • Among the commitments in the 2014 Malabo declaration, which is an affirmation of the Maputo declaration is enhancement of investment finance in agriculture both from public and private. • The African Union Comprehensive Africa Agriculture Development Programme (CAADP) resolved that increased investment in agriculture is the best option for economic development of African countries like Tanzania. Tanzania and Agriculture • The 2008 World Bank Report and the G20 countries’ meeting both recommended that countries with agricultural comparative and competitive advantage like Tanzania should strategically invest in agriculture for enhanced economic development. • The G20 of September 2009 called on the World Bank to work with interested Donors and Organizations to develop a multilateral trust fund to scale-up agricultural assistance to low-income countries. • Targets to 2025 is to invest at least 10% of national budget in agriculture sector and ensure agriculture growth rate of more than 6%.
  2. 2. 2019/08/12 2 Introduction continues • The Fifth Phase Government of the United Republic of Tanzania under the leadership of His Excellency Dr. John Pombe Magufuli is fully committed towards agricultural transformation in the endeavor toward industrialization and middle income economy Where is the problem • Most small holder farmers depend on hand hone • Difficulties of small holder farmers to access loans on banks • Lack of interest among graduates to invest in the agriculture sector • Poor markets of agricultural products • 60% of the child labour is coming from the agriculture sector in Tanzania ( Ngaiza 2016) Where is the problem • Children are the future of the nation. • Most of these children are working in the family farm and denied their basic need of going to school. • They end up being street children and become burden to their mothers and the nation Problem….. • The poor status of nutrition in Tanzania is affecting children and pregnant mothers. • According to DHS, 2010, prevalence in stunting in children of 0-59 months is 42%. 16% of 0-59 months of children are underweight. 57% of 6-69 months children are anemic and 40% of women are likely to be anemic. • Cause brain development problem of children. • Vitamins are highly needed for a healthier brain development. • The child brain development is very fast during pregnancy and the first two years. Problems cont….. • Under nutrition during pregnancy and up to two years of age causes permanent irreversible damage to child’s development and lowers capacity to learn in school • Iodine deficiency lowers IQ by 10-15 points. • Nutrition interventions at school age are too late to correct the brain damage at earlier life. • These all have impact also in productivity. Iron deficiency in adults decreases productivity up to 17 %( DHS, 2010). • Stunting reduces adult income by 20% this is from the global survey. Most of food we eat comes from the agriculture. • Serious investment in agriculture is needed . intervention program over look food security is useless. Problems continues • Climate change and its adverse effects • Inadequate weather index insurance for farmers • Disintegrated producer groups
  3. 3. 2019/08/12 3 What is weather index insurance A contract of indemnity by which, for a specified premium, one party promises to compensate another for the financial loss incurred by the destruction of agricultural products from the forces of nature, such as rain, hail, frost, or insect infestation etc. Crop insurance is purchased by agricultural producers, including farmers, ranchers, and others to protect themselves against either the loss of their crops due to natural disasters, such as hail, drought, and floods. What is covered Cereals, wheat, barley and maize Coffee Tree crop Tobacco All horticultural crops Any other Crop of Commercial value Flower crop, greenhouses and Irrigation equipment. Poultry equipment What is not covered Quality deterioration due to interruption of work or process accidents. Consequential loss due to delay in harvesting, detention or confistication of produce or equipment. Errors in pesticide application. Theft produce while still in the farms. Mysterious disappearances and unaccountable losses Controllable pest and disease that can be managed through recommended spray programs Benefit of weather index insurance • Facilitate huge investment in agriculture and market assurance • Involvement of all stakeholders in agriculture sector • Strengthening of producer groups • Involvement of youth in agriculture • Capacity building for women in the agriculture sector • Access of loans for farmers from TADB What do we do in the program • Negotiate with insurance companies to carry the risk( BUMACO INSURANCE COMPANY) • Train producer organization and other stakeholders on agriprenuership, market access, record keeping and financing agriculture • Link producer organizations to financial providers( Tanzania Agriculture Investment Bank) • Negotiate with TMA on weather data and pricing for the same Program cont……… • Link producers to markets internal and external markets • Food processing programs • Indigenous chicken production and introduction of local brooders • Planting trees in all operational areas to mitigate climate change • Construction of net house for producer groups
  4. 4. 2019/08/12 4 Challenges faced so far • Negative attitude of insurance in general among communities in Tanzania • Lack of coordination among producer organizations • Climatic changes • Gender issues • Most banks located in urban areas • Financial institution resistance on capacity building fund • Ignorance among small holder farmers on contract farming • Breaching of contract among small holder farmers How to solve these problems • We want input from the flow and experience from other countries THE END • Thank you and God bless you all