The World Bank is providing training in the area of agricultural risk management to various institutions in Ghana and Anglophone West Africa to equip them to identify opportunities and develop complementary products that help mitigate farmers’ risks.
The training programme aims to build the capacity of institutions in West Africa by providing the knowledge and skills required to design, price and implement agricultural index-based weather insurance programs.
It is a key step to helping institutions to identify opportunities that they could tap into by developing financial products that would help limit the impact of bad weather on farmers’ productivity and profit.
Malawi, Kenya, Ethiopia and Burkina Faso are some of the African countries piloting Index-based weather risk management programme.
Ghana will also soon run a pilot agricultural insurance scheme with the support of German Technical Cooperation (GTZ).
“By sharing knowledge on index-based weather insurance with the West
African insurance sector, the World Bank aims to improve the risk management capabilities of stakeholders in Africa working within agricultural supply chains,” said Carlos Arce, Senior Economist of the Agricultural Risk Management Team.
He said the weather posed a major risk to productivity and profit of farmers, making it difficult for them to access essential credit necessary to boost production and enhance earnings.
“Be it floods or drought, particularly where they are severe, it could become catastrophic for the farmer,” Mr Arce said.
However, agricultural insurance alone was not enough to solve the myriad of problems facing the agriculture sector, he noted.
“Insurance as a financial product might not be suitable for all farmers but for specific farmers and in specific situations and is therefore not a silver bullet,” Mr Arce said.
Mr Arce said it was more important to provide farmers with good agricultural practices and services that allowed them to improve productivity and to mitigate their risks.
The five-day training course in Designing Index-Based Weather Risk
Management Programs is being delivered by the World Bank’s Agricultural Risk Management Team (ARMT) and hosted by the National Insurance Commission (NIC).
About 50 participants from insurance companies, agricultural colleges, national meteorological departments and national insurance regulators from Ghana, Nigeria, Gambia, Liberia, and Sierra Leone are attending the meeting.
The design and delivery of the training course has been funded by the European Union’s All African Caribbean Pacific Agricultural Commodities Programme (AAACP).