Rural poverty accounts for 84% of all poverty. Smallholder farmers struggle to meet their basic monetary needs. This is due to the low yield and productivity that they can obtain with the methods that are affordable and accessible to them, often manual and obsolete. Due to the low margins these farmers make, a bad harvest season can mean plunging into deeper poverty and not being able to survive. In response to this pressing issue, Kilimo Salama, a microfinance insurance scheme, was introduced in Kenya in 2009. The primary objective of this initiative is to protect smallholder farmers from the adverse impact of extreme weather-induced crop loss. Notably, Kenya, where this scheme originated, has, as of 2022, 7.8 million people living on less than $1.90.

Insurance for Crop Loss Due To Extreme Weather

The soil in several African countries requires sustainable farming practices to prevent degradation. However, human activities, primarily mining, have resulted in significant nutrient depletion in African soils. This depletion, intensifying over the past decade, has further decreased the already low harvest output. Another key characteristic of smallholder farming in Africa is its heavy reliance on rainfed agriculture.

The combination of soil nutrient depletion and the unreliable weather patterns countries like Kenya have been experiencing in the past decades, ranging from drought to extreme rain, makes harvests unpredictable. This puts smallholder farmers at risk of falling into extreme poverty and not being able to afford to harvest next season.

Kilimo Salama

Kilimo Salama, which means safe farming in Swahili, was created based on the learning of a pilot in Kenya’s Laikipia district. The Laikipia district’s largest economic sector is agriculture at an estimated 35.5 billion Kenyan Shillings or $217.791.410. The region experiences dry and wet seasons, causing challenges such as droughts and excessive rainfall for small-scale farmers. In the first pilot in Kenya, hundreds of maize farmers were insured against drought in 2009. Following the drought that season, the initiative compensated all farmers between a 30% to 80% payout, depending on the extent of the drought.

Kilimo Salama holds significant importance for smallholder farmers, recognizing that the effects of a bad harvest season do not end in that season, affecting subsequent seasons. By providing insurance coverage, Kilimo Salama enables smallholder farmers to continue earning money, actively engage in the local and global economy and pursue cultivation in the following seasons despite setbacks caused by drought or excessive rain. This pivotal support prevents smallholder farmers in the eight countries where the program operates from plunging further into poverty. Instead, it empowers them to generate income that can be invested in adopting more efficient farming techniques or acquiring higher-yielding seeds.

Conclusion

Programs like Kilimo Salama can help tackle rural poverty. These microfinance insurance programs are highly tailored to the needs of the communities they serve, are more accessible and are designed to be affordable and easily understood.

– Sara del Carmen Navarro Galvan
Photo: Pexels