The role of (Micro)insurance in Agri-business Supply chains: A Case of Small Holder Dairy Farming in Zambia

Microinsurance Conference, UTwente-13thApril,2012,

Nuer, A.T.K.- Wageningen UR, Dijk G,-Nyenrode/Wageningen University,

Bullens, T-Nyenrode Business University

Netherlands Institute of Cooperative Entrepreneurship NICE BV

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Source: https://commons.wikimedia.org/wiki/File:Zambia_in_Africa.svg , Accessed on 10th April, 2012

Research problem and questions

Research problem:

Small holder dairy farmers in Zambia lack insurance to cover for risk due to lack of collateral

Research questions:

What role can Microinsurance play to make Small holder dairy farming sustainable in Zambia

Netherlands Institute of Cooperative Entrepreneurship NICE BV

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Our Data Source : Zambia

Netherlands Institute of Cooperative Entrepreneurship NICE BV

The study was a Qualitative OneDutch/Zambian Students were paired Interviews ( Semi-Structured Questionaire)ObservationsTrade fairs, Plenary sessions, Literature reviews ( Field Reports, Brochures, Presentations, )web portals

Smallholder dairy supply chainZambia / Rail / Lusaka/Kabwe/ Livingstone/Indola

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Research results IThe Small Holder Dairy supply chain in Zambia

Netherlands Institute of Cooperative Entrepreneurship NICE BV

 

 

FARMERS

CO-OPERATIVES

PROCESSORS

TRADERS/RETAILERS

CONSUMERS

 

Finance institutions/Insurance companies/Supplying industries

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Research results II

Netherlands Institute of Cooperative Entrepreneurship NICE BV

Only 2 locally embedded insurance companies, out of the lot. i.e.,

●Zambia State Insurance Company (ZSIC)

●Madison General Insurance Company

Provide DIRECT Agric Insurance to Farmers

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General Insurance Return, 2009Table 1: Zambia General Insurance Return, 2009, courtesy of Madison General Insurance, 2011, extracted from original table presented to research team

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Research results III

Netherlands Institute of Cooperative Entrepreneurship NICE BV

Few insurance companies offering products for small scale farmers

There is no micro insurance related company specifically offering insurance cover for small scale famers

Lack of proper and consistent promotion and sensitization.

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DiscussionsImplications ( Policy and Practice I )

Netherlands Institute of Cooperative Entrepreneurship NICE BV

. Clients of (Micro)insurance had been Beneficiaries of Government/Donor led initiatives

●Acquiring financial sustainability

●Therefore insurance packages had been embedded within the scheme to....

● Mitigate shocks

●Risk

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Implications ( Policy and Practice II )

Netherlands Institute of Cooperative Entrepreneurship NICE BV

Most farmers see insurance as extra cost

E.g., chibombo east had 44 registered farmer cooperatives but only 30%take insurance cover

Outreach by Insurance Companies is costly

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Interpretation Research Findings

Netherlands Institute of Cooperative Entrepreneurship NICE BV

More promotion and education about insurance

Encouragement of micro-insurance company

Effective partnership between ZNFU and insurance companies

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Discussion Points

Netherlands Institute of Cooperative Entrepreneurship NICE BV

Thank You

Netherlands Institute of Cooperative Entrepreneurship NICE BV