On April 17, 2019, a violent storm swept across Hurungwe district, Mashonaland West province, leaving a trail of destruction.
A total of 23 families were left homeless.
John Matenga (55) of Masikati village, who had sought shelter from the storm in a tobacco barn died after it gave in.
Matenga’s family is yet to recover from the shocking experience that left them without a bread winner.
The incident also resulted in the destruction of the golden leaf neatly stashed in the barn as it readied for the floors.
The sad part about Matenga’s story is that he was one of the small-scale tobacco farmers who had insured his crop through a contracting company.
Unlike most farmers who had signed entered into contracts unaware of the provision of insurance in some clauses of the contracts, Matenga was aware he had insurance and had informed his family about it.
Matenga knew that insurance provides peace of mind in the event of an eventuality.
- Mlalazi chronicles his rags-to-riches story
- Mlalazi returns to roots with a free concert
- MP ropes in church in anti-drug fight
- TSL profits slow as costs escalate
Keep Reading
He saw it prudent for him as a farmer to insure his tobacco against risks like fire, hail damages and loss.
Unknown to Matenga, the insurance company was a fly-by-night institution meant to rip farmers of their hard-earned cash.
This is despite several warnings by the Insurance and Pensions Commission to seek the services registered insurance companies providers.
Years later, Matenga’s family is yet to access the insurance payout for the losses incurred that year despite several efforts to locate and engage the firm.
Matenga’s predicament mirrors that of thousands of small-scale tobacco farmers who have lost trust in the insurance sector.
Lack of knowledge on the importance of agriculture insurance and the unaffordability of premiums have resulted in low policy uptake by smallholder farmers.
Most small-scale farmers do not insure their crops and property as they see the facility as a waste of money, while others, especially tobacco growers, have had bad experiences with bogus companies, forcing them to abandon the facility and take the risks as they come.
Sadly this comes at a time when the industry is making frantic efforts to improve insurance uptake.
Agriculture is a the low-hanging fruit given that the country is a agro-based economy.
On average, over 100 000 farmers register with the Tobacco Industry Marketing Board to sell their tobacco annually, and under normal circumstances, this could be a good number to drive insurance growth.
However, for the late Matenga and several thousands smallholder tobacco farmers, insuring the golden leaf has never made any difference.
An online explanation says insurance companies use data and statistics to predict levels of risk for various individuals or groups.
“This risk calculation information is also used to develop rating plans. Generally, higher risk factors will result in higher premium rates and lower risk factors will drive premiums lower,” it said.
Farmers believe most insurance companies are profiting from their sweat.
“This is a sad reality affecting most tobacco farmers, not only under Hurungwe district but around the country. Even if late Matenga had insurance no one came forward to assist,” said a local agriculture extension official who declined to be named.
Zimbabwe Tobacco Growers Association vice-president Believe Tevera confirmed that small-scale tobacco farmers are losing out financially on unclaimed funds.
‘‘Most smallholders usually insure their crop through the contractor, so it is the contractor who chooses an insurance company of their choice. This has made life difficult for them as it is not direct from the farmers. They are always in the dark about their benefits when they insure their crop,” Tevera said.
He, however, said he was unaware of any challenges faced by insurance companies in regards to tobacco farmers.
“The reality is that lack of financial independence is affecting smallholder farmers, and they cannot make choices on which insurance company can offer better services,” Tevera said.
An independent buyer, who declined to be named for professional reasons, noted that the problem with services offered by most insurance companies is that they are tailored for small-scale tobacco farming.
“Most insurance contracts are not clear and are vague with technical loopholes against farmers,” said the buyer.
He added that there was no wholesome approach to insurance for the golden leaf, one of the country’s largest foreign currency earners.
“Most insurance policies cover field only yet tobacco farming starts from seedbed, field, harvesting, grading, bailing and transportation to the floors. Also take note that most of our farmers do not have conventional barns, they use substandard barns with some still using grass-thatched roofs in the event of a barn fire insurance companies will say they cannot cover for substandard barns so the fire is negligence on part of the farmer. This is unfair and unjust for farmers,” added the buyer.
He further noted that natural disasters are overlooked.
“Let’s take a case of a hailstorm destroying the farmers crop, the rule is the insurance companies need to visit the affected farmer within 48 hours, they don’t come at all, but they will tell the contracting company to go and access the field. The company will assign inexperienced field officers yet it is the duty of these insurance firms to provide qualified assessors. Insurance companies of late take farmers’ funds and they don’t refund,” the buyer said.
He noted that there is collusion between insurance companies and tobacco contracting companies.
“Some insurance companies will pay 25% of farmers’ contributions for every farmer to the contracting firm as commission and it is now a money-spinning project affecting smallholder farmers,” observed the buyer.
Hurungwe Farmers Taskforce chairperson Wellington Chisepo noted that most insurance companies have made a financial killing that has negatively affected farmers’ wellbeing.
‘‘Farmers need packaged insurances that are affordable and cover from seedbed to transportation to the floor in the event that bales are stolen in transit. Farmers also need insurance certificates from these firms which are clear and transparent. Majority of the farmers don’t have good accommodation and sources of water but even if the crop is insured a lot needs to be done for their benefit,’’ Chisepo said.
Zimbabwe Tobacco Growers Association president George Seremwe said they had to intervene during this year tobacco selling season.
“We had to ask TIMB to suspend all stop orders where farmers raised the red flag over insurances. I was told it was done and we remain farmers voice,’’ Seremwe said.
He added that it was unwarranted for farmers to lose out.
“The issue is with contracting companies launching stop order without farmer full knowledge is a cruel method of theft affecting our membership around the country,” Seremwe said.
“Most of tobacco farmers view insurance with a negative perspective. Some were forced to sign for packages where deductions were made but unaware that they need to make claims. It’s a loss to farmers while insurance companies thrive on such profits. The relationship between tobacco farmers and insurance companies is not well without a better explanation and understanding. This has created a negative attitude towards insurance companies.”
He, however, called for a truce between farmers and insurance companies as way forward.
‘‘There is need for better education through awareness campaigns to make farmers understand the benefits of insurance and also insurance companies to own up on monies paid for and claim payments. This can be done through farmers organisations that they trust. Of late insurance companies have used merchants and contracting companies that have proved to be a failure,” he said.
Tobacco sector has the 2,5% insurance tax publicised in Statutory Instrument 103 of 2023 where Insurance and Pension Commission (Ipec) said it was the standard charge internationally and was not peculiar to Zimbabwe or the tobacco crop.
Ipec director insurance and micro insurance Sibongile Siwela said the externalisation levy was charged for all insurance business placed outside the country and had been in existence since 2016.
The problems encountered after Matenga’s demise calls for a comprehensive insurance products for small-scale farmers as well as concerted efforts to restore trust and confidence.
