GOROMONZI small holder farmers who received US$65 insurance payouts from the Agricultural Index Insurance Pilot as compensation for the drought will use this money for their 2024/25 farming activities, it has emerged.
The just ended 2023/24 agriculture season was in disarray after the El Nino induced drought wreaked havoc on the southern African region, leaving farmers with reduced crop output.
Zimbabwe is among the worst affected countries and President Emmerson Mnangagwa declared a national disaster earlier this year. Mnangagwa appealed for US$3 billion to respond to the disaster.
Most of the affected communities are in rural areas, which make up 60% of Zimbabwe’s population.
The Insurance and Pensions Commission (Ipec) first announced the agricultural index in May 2023, through a partnership with the International Finance Corporation (IFC).
The announcement followed a partnership agreement between Ipec and IFC three months earlier under the banner ‘Agricultural Insurance Support Project’.
Last week, payments made to Goromonzi small holder farmers totalled US$232 996,75, as compensation for the loss they incurred because of the El Nino induced drought.
From this amount, 1 800 farmers from 21 wards each received payouts of US$65.
Charles Chidanga, a small holder farmer in Goromonzi, told Standardbusiness that he was happy with the initiative as it illustrated the government’s willingness to work with communities in eradicating poverty.
Chidanga urged the government to take the initiative to other parts of the country to help other communities in need.
“We have received our payment, and we are happy about this initiative, and we hope it will help us kick-start the season,” he said.
“We also hope that the government can help push for this initiative across the country.
“With the hardships that farmers are facing, we hope that this will be helpful.
“When we paid for insurance, we were assured that we would get a return in the event that we fail due to El Nino-induced effects and we are happy that the insurance is paying back, and this will help us to buy inputs.”
Rutendo Taruvinga, a small holder farmer from ward 9, said she was unsure if the project would cover them as she thought insurance players would refuse to pay the claim as is the norm.
“I am so delighted. I never thought this will happen,” Taruvinga said.
“Even though we knew it was a government initiative, at first, when it was talked about, just as other projects, we are pumping money at, I was not sure it would cover us.
“But, I have seen how important this is, as now we are paid.
“This money will help us as smallholder farmers in Goromonzi to buy inputs for the coming season and we hope this season we will be productive.”
Goromonzi is a farming town in Mashonaland East province.
The initiative is an index-based insurance product designed to shield farmers from unpredictable climate change.
Finance, Economic Development and Investment Promotion minister Mthuli Ncube said the government understood the challenges faced by farmers amid climate change.
“Farmers continue to face headwinds, particularly those related to climate change,” Ncube said.
“Erratic rainfall patterns, prolonged droughts, and other climate-induced risks have threatened their productivity and income security, putting their livelihoods at great risk.”
Ncube highlighted the pivotal role played by the government, Ipec, the Access to Insurance Initiative, Insurance Council of Zimbabwe, farmers, and development partners, in spearheading the agricultural index-based pilot study.
“We recognise the importance of easing the financial burden on our smallholder farmers, and as such, the government is ready to subsidise insurance premiums for smallholder farmers,” he said.
“This subsidy will help make agricultural insurance more accessible, ensuring that more farmers can benefit from these innovative risk mitigation products.”
Ncube assured the farmers of the government’s commitment in supporting the initiatives that promote financial inclusion, empower farmers, and ensure food security.