Plans to mitigate losses incurred by smallholder farmers have stalled due to lack of insurance covers as underwriters have declined to insure them, citing low production.

According to insurers, insurance products for smallholder farmers has been curtailed by low premiums. Underwriters have also complained that farmers fail to get profitable markets for their products among other factors, leading to cancellation of their insurance policies.

“Some big co-operatives that we have been ensuring from Rusizi, have failed to get the market for their produce thus dropped from acquiring insurance, they told us our produce has failed to get the market and is rotting from the stores, thus what should we cultivate?” Ovia Kamanzi Tuhairwe, the deputy managing director of Radiat Insurance Company told Rwanda Today.

Supported by the government, the agriculture insurance scheme was Urishingiwe Muhinzi Mworozi”, which translates to “smallholder farmer, feel safe, you are insured,” the scheme widely remains untapped.

The government subsidies 40 percent of the cost of insurance and the rest of the bill is paid by farmers. The scheme covers maize, rice, chillies, green beans and Irish potatoes among others in the crops category while on the livestock segment it covers pigs, chicken and cows.

According to the 2019 figures from Prime Life Insurance Company, one of the leading players in the agriculture insurance, indicate that motor insurance fetched the highest revenues amounting to over Rwf4.9 billion, followed by bonds with more than Rwf1 billion, and fire Insurance with over Rwf1.1billion.

The lowest contribution came from agriculture sector at a paltry Rwf119 million. However, the company indicates that the agriculture insurance policy holds great potential, considering that the company started this business towards the end of the year 2018 and it grew from Rwf6.7 million in 2018 to Rwf119 million in 2019.

With the coronavirus pandemic effects, the insurers indicate that the loan portfolio from saving and credit cooperatives, banks and microfinance institutions have performed poorly, along with other market issues this has affected farmers who have been running their farming activities with loans.

During compensation time, farmers fear tussles with lawyers of insurance companies.