Insurance has become a hot topic within the agriculture sphere. It seems everyone is hopping on this insurance wagon. So, what is insurance specific to farmers? What are the aspects to look out for when deciding whether or not to have your farming insured? Moreover, which packages are beneficial to your cause as a farmer?
Insurance, in itself, is not new to farmers on a personal level, as most of us have some kind of insurance for items such as vehicles, houses, life insurance, health insurance (medical aid) and electronics – to mention a few. However, on a farming level, this is a new phenomenon.
We have borne witness to agricultural insurance with various packages by several financial institutions and insurance companies. So, what is insurance, and what does it entail?
Insurance is an agreement between an insurance company and the policyholder – in this case the farmer - in which the latter receives financial protection or reimbursement from the insurance company should there be losses or damages to the items being insured (in this case, livestock, machinery, crop, etc.).
The uncertainty of the Namibian climate, such as floods, fires, and drought does necessitate insurance, so perhaps this may be a welcome relief to most of us farmers. “Green is the new gold”, hence the protection of the wealth of farmers. However, what are the terms and conditions, and what items are being offered by different financial institutions?
Items that can be insured on the farm include livestock, crops, farming equipment and machinery, while household and personal items as part of the farming package could also be insured.
Agricultural insurance has been piloted before in other developing countries in efforts of alleviating factors that contribute to poverty due to unfriendly weather conditions. However, we are yet to see how the Namibian market will respond to the Agricultural insurance packages.
As farmers, we need to fully understand what the insurance packages entail, what the advantages and disadvantages are and what the cost implications will be as presented by Insurance companies and financial institutions offering this product.
We will take an in-depth analysis of the advantages and disadvantages of agricultural insurance in the next column.