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How to insure crops with a mobile phone – an experiment from Kenya

March 24, 2010
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For technophiles everywhere, an uplifting story from a recent issue of The Economist:

‘One of the things holding back agriculture in developing countries is the unwillingness of farmers with small plots of land to invest in better seed and fertiliser. Only half of Kenyan farmers buy improved seed or spend money on other inputs. Many use poor-quality seed kept from previous harvests. That is understandable when drought or deluge can destroy their crop, but it has the effect of reducing yields. A new microinsurance scheme promises to help.

Kilimo Salama, which in Kiswahili means “safe farming”, uses a combination of mobile phones and 30 automated solar-powered weather stations to provide crop insurance. It has been set up by UAP Insurance of Kenya, Safaricom, Kenya’s biggest mobile-network operator, and the Syngenta Foundation for Sustainable Agriculture, part of a big Swiss agribusiness group. After a successful trial with 200 farmers last year, Kilimo Salama has just been expanded in the hope of attracting 5,000 farmers in western and central Kenya this year.

Farmers pay an extra 5% to insure a bag of seed, fertiliser or other things like herbicide against crop failure. MEA Fertilisers and Syngenta East Africa, two agribusinesses hoping to benefit from higher sales of their products, match the farmers’ investment to meet the full 10% cost of the insurance premium.

The clever bit, however, is the administration. Local agents register a policy with UAP by using a camera-phone to scan a bar code on each bag sold. A text message confirming the policy is then sent to the farmer’s handset. Farmers are registered at their nearest weather station, which transmits data over the mobile network. If weather conditions deteriorate, a panel of experts uses an index system to determine if crops will no longer be viable. At that point payouts are made directly to the handsets of farmers in the affected areas using Safaricom’s M-PESA mobile-money service.

With no field surveys, no paperwork and no middlemen, transaction costs are minimal. The scheme is designed to be self-financing. And clear terms should help Kilimo Salama overcome farmers’ distrust of previous insurance schemes, says James Wambugu of UAP. So should word of mouth. The trial scheme was hit by one of the worst droughts in decades, triggering compensation payments of 80% of farmers’ investments. The average amount of insured seed in the area has now risen from 2kg per farmer to 4kg.’

And here’s a video from the Kilimo Salama website

Over to the technosceptics – what are the downsides?


  1. There is only one word in your entire article that i am skeptical of: “Syngenta” …are they loosing that much of a market to organics now that they have to get into the insurance business?

  2. The coverage and ease of use of all those technologies is certainly feasible (though I’d love to find out the bar code scanner they’re using). I like the idea of objective criteria for payout; it limits arguments and administration.

    The biggest challenge I see is phone ownership. At least in Kuria West District in Nyanza, Kenya, we’re at ~20% mobile phone penetration.

    Also, the payout system does have some problems: 1. significant variation in weather conditions (it can hail on one side of a hill and not another) 2. non-weather catastrophes (aggressive weeds, blight, pests).

    In our program, we’ve gotten 80% of our farmers to use improved seed and fertilizers after 3 seasons. We loan it to the farmers for the season and then train on its use by means of a group model. If farmers see taller maize next door, they want to find out how to get it.

    Also Leslie, “improved seed” doesn’t necessarily mean GMO. In our project in Nyanza province, we use hybrid seed, made with the millennia-old process of plant breeding. It works a lot better than the locally available stuff.

  3. Thank you for your feedback about seed, Mr. Carreon; i also use some hybridized seed with success. Will be curious to see what products the local farmers decide to invest in and the systems in which they are used. (ie: fertilizers are effective in hydroponic systems, etc.)

    It is mentioned that poor quality seed is kept from previous harvests. How could i find out what they are growing, and how much? Are these 5-15 acres of corn, soy, quinoa, or the sort? Concerned about the mention of herbicide when some wild herbs are a food source. Also, if drought conditions are prevalent, is the ground hard pan?

    Maybe consideration for where the water sources are, in combination with where the water will end up, guided by drip tape or the like, could be a good investment start. Would also be of service to prevent runoffs, contamination, etc, possibly providing the opportunity for a wetland reclaimaiton. If the ground is dry, then “weeds” are going to have a hard time, and the drip tape will be feeding only the crop. (Less herbicide/fertilizer necessary.)

    Getting the feeling from article that proper harvest and storage may be an issue. (Rains, mold, caved roofs, contaminated silo..are what is coming to mind). Maybe centralized community hubs with clearance/humidity accounted for
    and possibly a kiln, which could double/triple as a seed dryer, pottery production implement and soil sterilizer.

    I have no idea what you all are up against, but a combination of integrated systems as a solution is the idea inspiring me to write to you….

    And, in closing, i also like plant breeding. Our tomatoes would not have the flavor and consitancy that they do in our ancient greenhouse if it were not for the hand-pollinated seed from Holland.

    Wishing you all the very best, Leslie

    Oh, one more question: what back up for records (scanned with a device not owned by the farmer, but that the farmer is beholden to) would be available to the farmer in the event of lost data/system crash?

    And is the insurance in relation to weather events only? Does this in any way tie to subsidies?

  4. The video looks pretty lush, and the woman farmer mentioned that they do have rains…do they not use any roof catchment systems to store water for the dry periods? Would they have to use well water, if that is even available, and do they have a pump? Cryptosporidium in well water could be another concern…

    Do they have access to bleach or know the wild plants used for antimicrobial activity? (Simple cleaners like lemon, kitchen stuffs like garlic, ginger, peppers…) Epazpote is consisidered a weed around here, though has not “infiltrated my garden”, but long standing use, as an antihelminthic. Maybe there is a native plant there of the sort?

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