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[NAIROBI] Kenyan smallholders are 'micro-insuring' themselves against crop losses under a scheme launched this month (5 March) that combines mobile phone payment with the use of automated weather stations.

The scheme, Kilimo Salama — a Swahili phrase for "safe farming" — aims to give small-scale farmers in Kenya 'pay-as-you-plant' insurance, so if they lose their harvest they can still afford farming the following season.

Farmers with as little as one acre of land pay an extra five per cent of the value of the high-yielding seeds, chemicals and fertilizers sold by companies registered with the Kilimo Salama partnership.

The stockists use a mobile-phone camera to scan a bar code when farmers purchase supplies, which immediately registers the policy with African insurance provider UAP Insurance over Kenyan mobile network operator Safaricom's network. Farmers then receive a confirmation of the insurance policy purchase via a text message.

To enrol, farmers must be registered to one of the 30 solar-powered weather stations, each covering a 15–20 kilometre radius.

Based on these automated stations' weather measurements and crop rainfall needs, the system calculates whether there has been a severe enough drought — or excessive rainfall — for the farmers to receive compensation for their lost crop. Eligible farmers then receive direct payouts through a mobile phone-based money-transfer system.

African farmers depend heavily on rain-fed agriculture but their output has decreased in the last few decades because of a lack of nutrients in the soil and, more recently, unreliable weather patterns.

"This is a very innovative way of determining where there was a crop failure from lack of rainfall or it being there in excess," said John Barorot, Safaricom's chief technical officer.

So far 9,500 farmers have registered for the scheme, but James Wambugu, UAP managing director said they hope to reach 50,000 Kenyan farmers.

"We believe Kilimo Salama can revolutionize insurance and make it accessible to farmers," he said.

"By using the weather stations to verify local weather conditions, we are avoiding claims procedures that have created mistrust and led people to avoid insurance. As such, this strategy has the potential to make agricultural micro-insurance affordable and attractive for smallholder farmers and economically viable for insurance companies in developing countries that had previously written off the agricultural sector."

Kenyan small-scale farmer Jane Gathoni Simon told SciDev.Net: "This is a good idea because when you lose from a harvest there is a fallback to help you buy farm inputs the next season".

Kilimo Salama is a partnership run by African insurance provider UAP Insurance, the Syngenta Foundation for Sustainable Agriculture, based in Switzerland, agri-businesses MEA Fertilizers and Syngenta East Africa Limited, both based in Nairobi, Kenya; Kenyan telecommunications company Safaricom, and the Kenya Meteorological Department.