An insurance expert, Mr. Kwabena Akuamoah Agyekum, has emphasized the importance of agricultural insurance in protecting farmers against climate-related risks, boosting food security, and strengthening Ghana's agricultural sector. He made this call during a two-day online engagement on agricultural insurance organized by the Ghana Insurance College (GIC) and the Ghana Agricultural Insurance Pool (GAIP) under the TEMBO Africa Project. The event was attended by insurance companies and brokers.
Mr. Agyekum, Executive Director of the Chartered Institute of Marketing Ghana (CIMG), noted that agricultural insurance offers protection for farmers, agribusinesses, and livelihoods while reducing financial losses arising from adverse weather conditions and other farming risks. He highlighted that smallholder farmers in Ghana face challenges such as drought, erratic rainfall patterns, excessive rainfall, flooding, pest infestations, crop diseases, and market uncertainties. These climate pressures affect yields, incomes, and the ability of farmers to repay loans, threatening national food security.
The agricultural sector is a significant contributor to Ghana's economy, accounting for about 21% of the country's Gross Domestic Product and employing approximately 35% of the national workforce. Mr. Agyekum stressed that protecting the sector is a national priority. He urged farmers to prioritize protecting their farms through insurance, just as they do with increasing production. According to him, the growth of the farm and its protection should go hand in hand.
Agricultural insurance also benefits financial institutions by reducing credit risks, increasing agricultural lending, and improving the quality of loan portfolios. Mr. Agyekum emphasized that the successful implementation of agricultural insurance requires collaboration among key stakeholders, including farmers, insurance companies, GAIP, financial institutions, government agencies, regulators, and development partners. He identified low awareness, high transaction costs, inadequate climate and flood data, affordability concerns, and low insurance penetration as major challenges confronting the sector.
Despite these challenges, emerging technologies such as satellite monitoring, remote sensing, data analytics, mobile money platforms, and public-private partnerships present significant opportunities for expanding agricultural insurance coverage in Ghana. Mr. Agyekum noted that agricultural insurance serves as a critical tool for managing agricultural risks and protecting farmers' livelihoods. As climate risks increase, it will become an increasingly important component of Ghana's agricultural transformation agenda.
The TEMBO Africa Project, funded by the European Union and implemented in partnership with Delft University of Technology (TU Delft), the University for Development Studies, the Trans-African Hydro-Meteorological Observatory (TAHMO), the Ghana Meteorological Agency (GMet), and other institutions, aims to promote agricultural insurance in Ghana. The project seeks to build resilience and confidence within the agricultural value chain and encourage increased investment in the sector.
In conclusion, Mr. Agyekum's call for increased investment in agricultural insurance highlights the critical role it plays in protecting farmers against climate-related risks and boosting food security in Ghana. The successful implementation of agricultural insurance requires a collaborative effort from all stakeholders. With the support of emerging technologies and projects like TEMBO Africa, Ghana can expand agricultural insurance coverage and build a more resilient agricultural sector.
Key points
- Agricultural insurance is critical for protecting farmers against climate-related risks and boosting food security in Ghana.
- The agricultural sector contributes about 21% of Ghana's Gross Domestic Product and employs approximately 35% of the national workforce.
- Emerging technologies present significant opportunities for expanding agricultural insurance coverage in Ghana.
