Coffee insurance cuts bitterness of extreme weather for Kenyan farmers

by Kagondu Njagi | @DavidNjagi | Thomson Reuters Foundation
Friday, 18 July 2014 07:30 GMT

Insurance is helping Kenya's farmers stick with coffee - a good money maker - as growing it becomes more difficult

MURANG’A, Kenya (Thomson Reuters Foundation) – Coffee, once a reliable cash crop in Kenya, has been hard hit by the country's erratic weather patterns. Some farmers have swapped to more climate-resistant crops; others struggle through, making barely enough to live on.

But for a growing number of Kenyan coffee farmers, an insurance plan that protects their harvest against losses to extreme weather and weather-related ailments is making coffee growing a less bitter experience.

In collaboration with international institutions such as the Foundation for Sustainable Development, the World Bank, the Rockefeller Foundation and the U.K.'s Department for International Development, Kenyan insurance companies have over the past few years put in place index-based weather insurance to provide a financial cushion for farmers who lose crops due to flooding, drought, or other climate-linked disasters.

“Agriculture insurance is particularly important in Kenya and elsewhere in Africa today as extreme weather patterns generated by climate change are introducing greater volatility to food production and food prices,” said Wilson Songa, Kenya’s principal secretary for agriculture.

Since the scheme was launched in 2011, hundreds of Kenya's farmers have reaped the benefits.

Last year Peter Chege, a farmer from Gacharaigo village in central Kenya, lost his harvest to coffee berry disease, a common ailment caused by a fungus, after his farm experienced heavy rainfall. But as a member of the insurance scheme, he was compensated for the loss, meaning the damage wasn’t financially devastating.

"Coffee output is poor here because of diseases brought on by changes in weather,” said Chege. “Even when we are not so badly hit, we must still buy chemicals to spray against these diseases, and most of us cannot afford them."

Two decades ago, Kathuni Ntaari’s farm would have been teeming with activity during the coffee-harvesting season. Villagers would swarm Ntaari’s home because he was known to pay generously anyone who sought casual work at his coffee farm.

Today, however, the graying elder painfully picks the berries alone, barely able to earn enough to provide three meals a day for his family.

At its peak in the mid-1980s, coffee was one of the best paying farm investments in Kenya, with the country exporting up to 130,000 tonnes every year.

But since then, variations in weather conditions have seen a sharp decline in coffee output. Now Kenya has around 170,000 acres of land under the crop, producing about 50,000 tonnes annually.


“I was once rich because of coffee, but not anymore," said Ntaari. “But I cannot leave it because I still hope it will once again be a money making crop.”

Such determination is rare in Ntaari’s village in Muiru, eastern Kenya. A number of his desperate neighbours have cleared their coffee bushes to plant staple crops such as maize and beans. For those who have stayed with coffee, the pinball income the crop generates is largely used simply to cover basics such as food and school fees.

As Kenya’s population grows, more farmers do not have enough land to grow sufficient staple foods, said Dennis Maina, a field officer working with partners such as the plant-science company Syngenta East Africa to decide how the coffee-insurance scheme should be distributed. Those that do sometimes “suffer crop failure due to climate-linked tragedies like landslides and frost," he added.

Devoting a small portion of their earnings to insurance can help some Kenyan coffee farmers move on from mere survival and get a steadier profit from coffee, Maina said.

 “All a farmer needs to enlist with the scheme is a piece of land, coffee, and some savings to buy the premium," he said. “But there are challenges, such as establishing how much premium a farmer should pay per acreage as well as what should be paid to farmers depending on how bad a season has been."


Figuring out the correct cost of coverage is made more difficult by Kenya's microclimates, pockets of weather - some measuring just a few kilometres - that differ from the climates of the surrounding areas.

Chege’s village, for example, is chilly at the time of year when the coffee is flowering while Ntaari's village, about 200 kilometres away, sits in searing heat.

According to a 2012 report on index-based weather insurance by Adaptation to Climate Change and Insurance, a bilateral project between the Kenyan and German governments, the temperature extremes are detrimental to the coffee crops in both villages.

The Arabica bean, which accounts for 99 percent of Kenya’s coffee, requires temperatures in the range of 18 degrees Celsius to 21 degrees Celsius for optimum production, the report says. Above that, the coffee can develop tumours and shed flowers resulting in depressed yields. Temperatures below the threshold can lead to diseases such as coffee berry disease.

With microclimates causing wildly varying temperatures across small areas all over Kenya, insurers are still struggling to develop effective index insurance, which usually relies on payouts being triggered after a certain temperature or rainfall threshold is reached.

Vincent Nduati, of UAP Insurance, said coffee insurance currently relies primarily on rainfall data to determine payouts.

But even the currently flawed system is proving a lifeline for farmers who refuse to give up on coffee.

“Coffee insurance is good because even when output is low I am assured of something to fall back on to maintain the crop until the next harvest,” Chege said.

Kagondu Njagi is a freelance contributor for the Thomson Reuters Foundation, based in Nairobi and writing on climate change issues. 

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