Helping African farmers with insurance

Summary: Rose Goslinga’s aim is to help resource-poor farmers apply improved production technologies for better productivity and higher incomes. 
Where: Nairobi, Kenya
Founder: Rose Goslinga
Impact: 711.824 households in nine countries (2018)

 ‘Loans create debt, insurance generate improvement.’ This catchphrase is upheld by social entrepreneur Rose Goslinga. She works together with the Pula advisor’s group, a project that covers 1.7 million harvest risks for over 700.000 small scale farmers in nine African countries. Rose was born and raised in a family of German missionaries in Tanzania. After finishing Political Economy of Development in London she returned to Africa and realised that loans devastate farming families if their harvest is destroyed through outside factors. 

Because of the high risk of failure, farmers tend to be very cautious with planting their seeds, let alone experimenting with diverse crops. They use  cheap, low quality fertilizers, limiting the profit of a possible successful harvest. As Rose knows: ‘Entrepreneurial spirit is not encouraged.’ 

For these types of problems Pula formulated the area yield insurance. The financial coverage determines the average agricultural yield per defined area. If, at the end of the season, harvest falls below the average yield index farmers will get their investment reimbursed. Rose clarifies the concept with an example from South Africa: ‘Here, in 2015, farmers would buy an insurance of 30.000 rand (200 euro) at the beginning of the season. They would receive an encoded bag of seed. When they would text their personal code on their telephone a satellite would allocate their position and send them data about the predicted rainfall in the coming three weeks.’ 

In this case the satellite not only measured clouds –which mean when it’s going to rain- but also indicated how much rain was going to fall. Essential data for farmers who were faced with the decision whether or not to invest in certain crops. Either way, the farmers would be insured that, if rain would not be coming, they could return their seeds and get their money back.   

Rose argues that area yield insurance not only benefits small scale farmers, ‘but also relieves providers of the necessity to visit each individual farm.’ On the other hand, however, measuring the average yield index prior to each season still proves to be costly, especially in remote areas. 

Another problem for Rose is convincing small scale farmers to buy insurance. Although the ones with knowledge of insurances are more likely to get along –as do very poor farmers- a lot of peasants take a more reluctant stance. Rose has heard their arguments numerous times:’We have survived this far, why should we take an insurance now?’

Challenges, however, don’t constrain Rose:’ Our go-to-market strategy is to ‘embed’ insurance and work with the existing distribution channel for agricultural inputs, i.e. small agro-dealers at the village level. These agro-dealers create trust, inform farmers and support them in completing the mobile-based registration.’ 

Furthermore, Pula hosts radio broadcasts to push promotional messages and commercials:’ Considering more than 65% of the world’s arable land is located in Africa, and 61% of Africans work in agriculture, the sector has enormous potential to not only to feed Africa,  but also to eliminate hunger and to be a major player in global food markets. Therefore, our motivation as Pula is to provide financial insulation for farmers who otherwise do not have access to insurance.’

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