Agricultural Insurance in Kenya

Agricultural insurance (or agriculture insurance) pays farmers when crops, livestock, poultry, greenhouses, fish or farm assets are lost or damaged by insured events such as drought, floods, disease, fire or theft. It is either indemnity cover, which pays your own assessed loss, or index cover, which pays when a measured rainfall, pasture or area-yield figure crosses a trigger.

No. No Kenyan law makes crop or livestock insurance compulsory. In practice many farmers need it anyway because banks, SACCOs, input-credit schemes and dairy cooperatives increasingly ask for proof of cover before they lend.

The main types are crop insurance (multi-peril or named-peril), livestock insurance (death and theft of animals), dairy cow cover, poultry cover, greenhouse and horticulture cover, fish farm (aquaculture) cover, forestry and orchard cover, farm property packages, and index-based covers such as area-yield, weather and satellite-pasture insurance.

The one insurer that publishes rates charges 4% to 9% of the sum insured a year for livestock and 4.5% to 15% for crops, with minimum premiums of about KES 3,000 to 5,000. A dairy cow valued at KES 150,000 typically costs around KES 6,000 a year. Subsidised schemes cost far less: KAIP maize cover has cost farmers about KSh 620 an acre.

About nine of the roughly 36 general insurers we checked publish farm products. Several cover crops and livestock, a few sell only livestock, and a couple cover only fish farms or horses. Our insurer comparison lists who offers what, and we compare the ones that fit your farm.

Yes, although not from every insurer. Some insurers cover a single valuable cow, while others want herds of 20 or more. Smallholders growing maize and other listed crops on 0.5 to 20 acres can join the subsidised area-yield scheme where their county runs it, and dairy cooperatives often arrange group cover for members.

Indemnity cover pays what you actually lost after an assessor or vet inspects it. Index cover pays everyone in an area when a measured figure, such as rainfall, satellite pasture or the area's average yield, crosses a trigger. Index cover is cheaper and pays without a claim form, but it may not pay if your farm suffers and the area as a whole does not.

Talk to your county agricultural extension officer, who registers farmers for the subsidised area-yield cover (KAIP), often at ward meetings, before the rains. You pay half the premium; the government pays the other half for 0.5 to 20 acres of a listed crop. Farmers registered on KIAMIS for subsidised fertiliser in the pilot counties are covered automatically.

Often, yes. Lenders increasingly ask for crop or livestock cover before financing inputs, dairy cows or equipment, and some insurers say their livestock policy can serve as alternative security. Tell us who the lender is so the policy names them where needed.

Each policy has its own exclusions, but these are common across Kenyan farm covers:

• Poor husbandry, neglect or deliberate damage
• Animals that die of starvation, malnutrition or feed poisoning
• Disease present before cover started, and some notifiable outbreaks
• Theft without forced entry or where animals simply disappear
• Drought on irrigated crops, and pests you could have controlled
• Losses where the carcass was disposed of before the vet's post-mortem

We point these out before you buy, so nothing comes as a surprise at claim time.

Indemnity claims must be settled within 90 days of being fully documented under the Insurance Act; good livestock claims are often decided within days. Microinsurance claims must be paid or rejected within 10 days. Index payouts are automatic once the season's data is in.

It costs you nothing extra: the insurer pays our commission. We compare the insurers that actually cover your crop or animals, explain the conditions that decide claims (tagging, vet reports, planting dates), and stay with you if you claim. Naveah Capital is an IRA-licensed insurance agency in Nairobi.