SADP mulls agro-insurance
Initiative to protect smallholders from crop losses, disasters starting August
MOSA MAOENG
MASERU – Lesotho’s Smallholder Agriculture Development Project II (SADP II), in partnership with the UN World Food Programme (WFP), will pilot agricultural insurance for farmers across Quthing, Mohale’s Hoek, and Mafeteng districts from August. The scheme aims to shield smallholders from financial ruin caused by natural disasters, pests, and market volatility. Agricultural insurance provides a critical safety net, enabling farmers to recover losses and sustain operations after crises.
On Tuesday, SADP II hosted a stakeholder workshop to validate a draft feasibility report for the national rollout. Farmers, experts, and agricultural institutions contributed insights to finalize the framework.
The pilot falls under SADP II’s Sub-component 2.4, which promotes subsidized insurance and investment safeguards for vulnerable growers – a resilience tool to combat climate shocks.
Project Director SADP II, Mpaki Makara, says that they are working on putting the scheme in place due to the challenges facing the agriculture sector such as snow, droughts, excessive heat and hail frost – among others. He noted that the ministry and SADP found it prudent to put this scheme in place for such climatic scenarios so that farmers are able to insure their crops and recover what they lost.
He said they conducted a pilot study across the country to etablis the feasibility of the project, noting that they have come up with recommendations to share with all responsible entities; while also coming up with ideas that will strengthen the feasibility study report on how best can they implement the scheme.
Makara added that the purpose of the workshop was to share insights on the report to finalise the best way forward, informed by the recommendations made.
He said: “this is the first agricultural insurance in the country therefore it is important to contextualise it in the country although we have learned from other countries. We are already pleading with farmers in areas where this will cover because it will not cover all areas in the beginning. We are going to pilot it in districts that are mostly facing climate change challenges such as Quthing, Mohale’s Hoek and Mafeteng,”
Makara emphasized the need for farmers in those three districts to consult with the office of the SADP about the scheme and how it will work so that they benefit from the project – especially in the piloting phase. He said this is a package that contains subsidy which eventually aligns with the agricultural insurance.
On the other hand, SADP II Agriculture Risk Management Coordinator, Maoala Khesa, noted that this kind of insurance is called a micro-insurance and they are going to use an index approach which consists of a weather index insurance and area yield insurance. He said when they get into weather index insurance; they will be looking at natural hazards which include floods, drought and pests that are natural events.
He noted that the primary hazard that is found in Lesotho is drought and drought related hazards such as heat wave.
He mentioned that Lesotho has never had a drought insurance noting that of course agricultural insurance covers both crops and livestock but for starters the insurance will commence with crops being most importantly focusing on maize and beans.
In her presentation of draft feasibility study on agricultural insurance Lesotho, KESI Business Solutions Social, Environment and Climate Adaption Expert, Moipone Letsie-Ndlovu, said the feasibility study is mandated to solicit inputs, promote buy-in and cultivate support during the study implementation. She said the focus group includes female farmers, youth farmers, livestock –only farmers and mixed (crops and livestock) farmers.
She said the limitations comprises of low participant turnout (government), low mobilization and support at district and resource center levels given that the survey coincided with harvest season, National Maize Producers Organisation’s (NAMPO) exhibition and the SADP II mission, limited youth participation.
Letsie-Ndlovu said on gender and age vulnerabilities, women face barriers to inputs, networks, finance and insurance, older adults lack digital literacy and awareness and youth prefer digital tools such as e-vouchers and mobile insurance.
In terms of policy and institutional landscape, she noted that the Central Bank of Lesotho is reviewing the Insurance Act of 2014 (Draft Bill stage). She said there is need for service providers to establish own insurance specific policies and guidelines.
In conclusion she pointed out that “feasibility assessment confirms technical and social viability of piloting bundled agriculture insurance and e-voucher models in Lesotho, but requires addressing structural gaps in infrastructure, literacy and service delivery.
By leveraging digital transformation and community resilience models, Lesotho could deliver climate protection and inclusive rural growth, necessitating innovation, collaboration and sustained investment.”
While presenting on recommendations for government and policymakers, KESI Business Solutions Finance and Insurance Expert, Fusi Morokole, said there is need for government to establish an enabling policy framework for agricultural insurance supported by subsidies and tailored legislation (Draft Insurance Bill. He said this also implies amendment to national subsidy policy to include agricultural insurance and e-voucher.
He also noted that there is need for digital readiness which is to partner with Vodacom Lesotho and Econet to enable offline transactions & offer vendor liquidity support and a need for stakeholder coordination to establish a multi-stakeholder taskforce for agricultural insurance and e-voucher integration, including public, private and community-based actors.
