With effect tomorrow the pilot stage of the programme is expected to be rolled-out to provide security for smallholder farmers.

“In a bid to minimise the high risks associated with livestock farming in the country, the National Insurance Commission (NIA) had given the GAIP the permission to begin the pilot phase of the programme,” the General Manager of GAIP, Mr Ali Muhammad Katu, told the GRAPHIC BUSINESS in Accra.

“A smallholder farmer rearing about three cattle, for example loses his or her income in case their animal suffers accidental death. So, the livestock insurance scheme will provide security for such farmers in case of untimely death of their animal,” he said

According to him, stakeholders have already concluded discussions about the modalities of the programme. So the programme would be introduced by the NIA in collaboration with the GAIP and all the agricultural insurers.

He noted that the focus of the programme was primarily to help smallholder farmers in the country, explaining that the animals would be monitored through electronic tagging to ensure proper identification.

Example from other countries

In the United Kingdom (UK), for instance, livestock insurance is a restricted policy largely offered by specialist insurers. The policy is basically patronised by farmers, camel and cattle herders and some pet owners.

Generally, the loss of livestock by slaughter, death, disease or theft can occur through several unaccountable causes. This type of insurance, therefore, provides adequate compensation in the event of loss of an animal.

In Ghana, the NIC which, is the regulator, is introducing the livestock insurance through the GAIP for the first time in the agricultural sector. However, the agricultural sector, which employs a very large proportion of Ghanaians, has performed poorly in the last six years. In 2015, the sector grew by 0.04 per cent.

This is in spite of the fact that over the past decade,the government has implemented a number of important interventions in the agricultural sector to make it attractive to investors.

These include buffer stock management, fertiliser subsidies, livestock and fisheries development, irrigation and mechanised systems and the Youth in Agriculture programme.

But players in the financial sector think these interventions are not enough to woo creditors for which reason they have asked for governments’ intervention to make agricultural financing attractive to lenders.

Institutionalised insurance scheme

Mr Katu indicated that an institutionalised insurance scheme in agriculture will go long way to improve the agric sector and make it attractive to investors.

He said it was about time insurance companies designed policies for the agric sector as the country is experiencing less than 30 per cent of rainfall than it did a decade ago, which according to him was due to the effects of climate change.

According to him, crop and livestock production are influenced by climate changes, biological (pest and disease) and other perils (bush fire).

He noted that the impact of the climate change such as drought, excess rainfall, flood, humidity, higher temperatures results in low yield which threatens the food security of the country.

“Climate change will increase the frequency and intensity of droughts, floods and other extreme weather events, but uncontrollable pest and diseases which are biological in nature also affect the agricultural production,” he said.

Patronage of agricultural insurance

He opined that patronage of the agricultural insurance has been low since the GAIP was set up in 2011 to provide the “missing-link”–crop, livestock insurance.

“The mandate is to provide sustainable insurance services to farmers and key stakeholders in the agricultural production value chain to cover the biological assets,” he said.

The managing director stated the GAIP had crop insurance for smallholder farmers through aggregators’ medium and large-scale commercial farmers.

“The GAIP provides poultry insurance for poultry farmers and other stakeholders in the Poultry Industry. It also currently provides weather index insurance, drought index insurance cover for maize, sorghum millet, soya and groundnuts,” he added.

Mr Katu said agricultural insurance was aimed at providing protection to key stakeholders in the agricultural production value chain in the event of crop failure or loss of yield due to natural disasters.—GB