National Agriculture Insurance Scheme

1.Introduction

The National Agriculture Insurance Scheme (NAIS), launched on April 23, 2019 by the Ministry of Agriculture and Animal   Resources (MINAGRI), is meant to mitigate risks and losses incurred by farmers due to unpredictable natural disasters, pests and diseases that affect their livestock and crops. Dubbed “Tekana Urishingiwe Muhinzi Mworozi,” the scheme also enables the farmers to easily access financial services and ensure flow of credit to the agriculture sector. It operates in all 30 districts of the country.

The Government contributes 40% on premium and  farmers contributes 60% on value of cost of the premium.  In the initial phase, this insurance scheme covers dairy cattle including both cross and exotic breeds, and rice and maize in crops. Starting with the next fiscal year in July 2020, the insurance scheme will be extended to many more crops including beans, soya beans, Irish potatoes, cassava, banana, French beans and Chili,  and animals such as poultry and piggery.  

Agricultural insurance is one of the de-risking tools of Agriculture sector. Its purpose is to reduce the risk profiles of agricultural value chain actors and thereby increase the appetite of lenders and investors to the sector.

NAIS is  Implemented through a multi-agency framework of insurance companies, financial institutions, NGOs, among others under the overall guidance and control of the Rwandan Government where MINAGRI is primarily responsible of promoting insurance through a consultative and participatory approach which will establish an enabling legal and regulatory environment.

This insurance is being implemented through a multi-agency framework composed of selected insurance companies under the overall guidance and control of the government. Currently, SONARWA, PRIME and Radiant are the three insurance companies that are implementing the National Agriculture Insurance Scheme.

2. Livestock Insurance Product

For Livestock Insurance, farmers can insure only crossbred and exotic which are in the following age group:

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  • Calves above 90 days and up to 1 year old
  • Heifers from 1 to 2 years old
  • Heifers pregnant and milking cows above 2 year and up to 8 years old

The Insurer indemnifies the insured, subject to the limit of indemnity (i.e. Sum Insured), in respect to the insured livestock during the period of insurance due to death as a result of :

• Accidents (lightning, internal and external injuries, flooding and landslides)
• Illness and diseases of terminal nature
• Emergency slaughter on advice of a qualified veterinary  practitioner
• Epidemics

The Exclusions in livestock Insurance  are:

• Malicious or willful injury or neglect, over loading, unskillful treatment
• Accidents occurring and/or diseases contracted prior to commencement of risk (death of animal arising from pre-existing conditions)
• Poor feeding (intentionally)
• Intentional slaughter of the animal
• Theft or clandestine sale of the insured animal
• Loss of Animal(s) due to negligence (Stray or missing)
• Deliberate or nonprofessional administration of foreign substances that are harmful

In the case of loss, the insurance company compensates the farmer the value of the cattle insured (Sum Insured).

In Livestock, Insurance Radio frequency identification (RFID) is used as a  method of permanently identifying individual animals. All insured animals are tagged by  RFID microchip, and also claim is reported through Data Base Management System.

3. Crop Insurance Products

3.1. Hybrid Insurance Cover (Weather Index and Area Yield Index)

1. Product description

The product is covering maize and it is based on daily weather data provided by METEO RWANDA, extrapolated on a 4 by 4 kilometers grid from ground meteorological stations data and ARC2 satellite measurements. Each zone is precisely located on the grid and each and every plot of insured farmers are related to the zone.  However, discrepancies between the weather data and actual rainfall observations on farmers’ plots shall trigger a shift to Area yield coverage, where crop cutting experiment will be conducted in randomly plots to determine the loss. This hybrid cover is a cover for excessive rain, flooding, landslides, hailstorm and windstorm.  Hybrid crop insurance cover loss of farmers up to 80% of the expected yield and Premium  rate is 10%.

1. Exclusions

 Damages caused by or being the consequences of any risk not specifically covered, fire, lightning, explosion, volcanic eruption, earthquake, controllable diseases, weeds and/or controllable insect infestations, action of birds and animals including grazed by domestic animals, voluntarily release of water from dams or levies, poor crop stand or crop performance due to defective seed, theft / clandestine sale of the insured crop, intentional destruction of the insured crop, negligence on crop management, wilful acts, sabotage, pollution, toxic wastes, bad use of chemicals, defective chemicals, damage caused by terrorism and war.

3.2 Area Yield Index crop insurance product

1. Product description

This product cover maize and rice ,area yield index cover  yield losses due to: drought, floods, landslides, pests/ diseases, storms, natural fire and lightning.  Through AYII, insured farmers within a defined Unit Area of Insurance (UAI) will receive a payout if the area average yield for that UAI is lower than a predetermined threshold (average) yield.  The Area yield index cover captures all causes of yield loss. Guarantee losses up to 85 percent and premium rate is 7,08 for Rice and 8,025 for maize.

1. Exclusions

 Damages caused by or being the consequences of any risk not specifically covered, nuclear risks, action of birds and animals including grazed by domestic animals, poor crop stand or crop performance due to defective seed, theft / clandestine sale of the insured crop, intentional destruction of the insured crop, negligence on crop management, willful acts, sabotage, pollution, toxic wastes, bad use of chemicals, defective chemicals, damage caused by terrorism and war.