8/12/2019 UAP Seeks to Milk Dairy Farmers

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| Nairobi Business MonthlyMarch

COLUMN:TECH@WORKPeter Wanyonyi P.50MORE INSIDE

Briefing

Alow-cost livestock insur-

ance has been launched to

protect small dairy farmers

against losses resulting from

the deaths of their cows. The

initiative, which aims to insure

over 500 cows in the pilot stage

in 2013 and 3,000 in 2014, targets

small-scale farmers working

with rural cooperatives.

Livestock insurance is a

critical development in Kenyas

agricultural sector, considering

that the livestock sector contrib-utes over 12% of the nations

GDP. With the average value of a

dairy cow standing at over $450,

this is a significant investment

worth protecting, says James

Wambugu, Managing Director of

UAP Insurance.

The scheme is the first ultra-

aordable insurance available

to dairy farmers in Kenya, and

was developed by the Syngenta

Foundations Kilimo Salama,

Tanykina Dairy Cooperative, UAP

Insurance, Heifer Internationals

East Africa Dairy Development

project and The Lundin Founda-

tion.

Farmers can buy a one-year

cover for 3.5% of the value of

each animal. To ensure that

farmers do not lose their cattle

to common and preventable

diseases, they are also required

to purchase an animal care

package consisting of tick

control, deworming, vaccines,

and minerals. In a recent study

in Zambia, the implementation

of a similar animal care package

reduced annual mortality rates

from 22% to 1.6%, as a result of a

drop in preventable diseases and

improved animal health.

Tanykina Dairy Cooperative

pre-finances the premiums and

deducts the amount owed from

farmers milk deliveries through

their existing internal credit

structure. The yearly cost of the

premium for an average high-

yielding cow valued at Sh40,000

is Sh1,400. A care package costs

an average of Sh4,200, which is

paid in quarterly installments of

about Sh1,050.

The value of 4.3 litres of milk

per month for a year covers the

amount owed for the insurance

and care package for an average

high-yielding dairy cow.

During the cover, if a cow

dies, the farmer calls the Kilimo

Salama helpline and a call center

agent dispatches a veterinarian

to verify the cause of death. The

insurance payout is sent to the

cooperative, which deposits it

into the farmers bank account.

Through our support of the

East African Dairy Development

Project, Heifer Kenya has seen

Tanykina Dairy Cooperative grow

from 2,299 farmers to 4,057, says

Alex Kirui, Kenya country direc-

tor of Heifer International. We

see tremendous potential for

the cover to reach over 125,000

farmers at our 21 partner dairy

cooperatives in Kenya.

The livestock cover is a

significant step for the Syngenta

Foundations agricultural

insurance initiative, which has

oered smallholders low-cost

crop insurance against weather-

related risks since 2009. Last

year, Kilimo Salama insured

73,000 farmers in Kenya and

Rwanda, says Syngenta Founda-

tions Executive Director Marco

Ferroni. When [farmers] accrue

savings from their harvests,

dairy cattle are a popular next

investment and one that we

believe is just as vital to protect

as crops.

UAP seeks to milk dairy farmersFarmers in NorthernRift Valley among thefirst to be covered

The amount of milkper month that willprovide annualinsurance cover for anaverage high-yieldingdairy cow.

4.3 litres

The cover will

support a sector

which contributes

to 12% of the

nations GDP.