The Sunday Mail
Farming is a risky enterprise as it is prone to a number of natural forces which include loss from fires and natural disasters as well as theft.
As a result, experts say it becomes imperative for the farmer to purchase insurance in order to prevent total loss of farm property, yield or revenue through a fall in agricultural prices or other disasters.
However, studies show that the levels of insurance in the farming sector in Zimbabwe are very low with agriculture contributing barely five percent to gross premium income of insurance products.
Farmers do not seem to appreciate the insurance products offered by insurers and the basic value of agricultural insurance policy.
“The fact that an insurance policy is purchased when the business is performing well and that it only becomes useful when the farmer suffers a loss, which could be years down the line, makes it difficult for farmers to pay the premiums with immediate gratification,” said UZ lecturers, Catherine Tsikirayi and friends, in the Journal of International Business and Cultural Studies.
However, agricultural insurance is usually considered as a risk-mitigating tool when the level of income from agriculture becomes significant.
Insurance is even more important in Zimbabwe and other African countries as the climate is becoming increasingly unpredictable and erratic.
This is evidenced by heavy rains which pounded the country at the beginning of the year and resulted in floods destroying crops and livestock, and even human life in some parts of the country.
“Many farmers have lost their crops due to floods and we fear that the national output for this season will decline,” Zimbabwe Farmers Union president, Mr Abdul Nyati, said last week.
The challenge is that we received late rains and at the same time we witnessed heavy rains which flooded most of our crops.
“The yields will be much lower than what we got last year due to late rains and flooding. In some areas if we don’t get the rains until next month, we will be hit by both drought and floods.”
According to the 2015 National budget, Finance and Economic Development minister Patrick Chinamasa said the overall agricultural growth for 2015 was projected at 3,4% but could be less due to floods.
Experts say the risk could have been lower if farmers had bought insurance.
