- Published on Tuesday, 19 June 2012 02:22
- Written by SEBASTIAN MRINDOKO
- Hits: 932
THE Bank of Tanzania (BoT) and the Tanzania Insurance Regulatory Authority (TIRA) are finalising the formation of a special unit to oversee the establishment of an insurance cover for crops and farms to ensure farmers are indemnified from various risks, especially the vagaries of weather.
This was said in Dar es Salaam on Monday by the Commissioner of Insurance and TIRA Chief Executive Officer Mr Israel Kamuzora at the inauguration of the Regional Certificate in Agriculture insurance programme in the country. “The process of picking up a consultant and volunteer staff for the operationalisation of the crop and agriculture insurance unit has reached an advanced stage,” he said.
He said the main beneficiaries of the non-commercial insurance cover will be farmers engaging in the cultivation of food crops like maize, beans, barley and sunflower. The pilot project is already being carried out in Kilimanjoro region and Mbulu district in Manyara Region.
“Crop and agriculture insurance is fundamental to the national economy as adverse weather conditions like drought, excessive rains and storms that cause heavy losses to farmers pose a major threat to production, reduced farmers’ incomes, serious farming and decreased investments,” he said.
Agriculture insurance, he added, will be extended to cover losses on livestock, fisheries and forestry caused by weather and similar events beyond the control of farmers. Despite the fact that the insurance industry grew at a healthy rate of over 20 per cent annually a decade ago, its penetration level is just 1 per cent of the country’s Gross Domestic Product (GDP) against the world average of 2.3 per cent.
Farming remains to be the most important economic activity in East Africa and in Tanzania it accounts for almost 80 per cent employment of its citizens. In Kenya, it carries about 75 per cent, Uganda 82 per cent, Malawi 80 per cent, Mozambique 80 per cent and Ethiopia 85 per cent.
The Director of the Nairobi College of Insurance said agricultural insurance is a form of risk management used to hedge against the danger of a contingent that will help smallholder farmers’ access loans from lending houses. “Financial lenders in the region have traditionally regarded agriculture as too risky an area,” he said.
As trainers rolling the course to nurture agriculture insurance experts in the region aims to give farmers assurance for their farming activities that will ultimately call-off weather related poverty. The course being carried out in Tanzania has already been rolled out in Kenya and Uganda.
It will later move to the Central African Republic, the Comoros, Democratic Republic of Congo (DRC), Djibouti, Eritrea, Ethiopia, Madagascar, Mauritius, Seychelles, Somalia, Sudan and Zambia. The training on the Regional Certificate in agriculture insurance is facilitated in conjunction with the College of Insurance- Kenya, United States Agency for International Development (USAID) under the Competitiveness and Trade Expansion (COMPETE) programme, the Institute of Finance Management (IFM) and TIRA.