Extreme weather events can devastate farmer families for a long time because agriculture is their main source of income. But research shows that up to 82.7% of Nigeria’s farmers are not insured for this damage. Research has also pointed out some obstacles to traditional insurance for small farmers in African countries. Premiums may be too expensive, and claims difficult to make. An innovative form of insurance called index insurance has gained traction in developing countries in the past decade. Payouts are triggered automatically when specific weather conditions, such as rainfall levels or temperature thresholds, are met, eliminating the need for individual claims. This system ensures quicker compensation based on objective data, reducing delays and administrative costs. This has been found to work well in Kenya and Ethiopia.
Case for Insurance for African Farmers
