Kilimo Salama, which means “safe farming” in Kiswahili, is an innovative program operated by Safaricom, Kenya’s largest mobile operator, Syngenta Foundation, the foundation established by the Swiss agribusiness, and UAP Insurance. The initiative seeks to expand crop insurance to smallholder farmers in rural Kenya through the use of mobile phones. In a world of increasing uncertainty, risk management is essential for agriculture, and the team behind Kilimo Salama is betting that innovative technologies can bring risk management to the bottom of the pyramid.
Farmers wishing to insure their crops with Kilimo Salama purchase seed and fertilizer from registered vendors who have been equipped with a camera phone loaded with special software. At the time of sale, the salesperson takes a picture of a special bar code on the products and an SMS is sent to the farmer’s phone confirming the insurance policy. For their work, agents receive a commission. Pricing has changed, with the premium originally subsidized, but in mid-2011, farmers were paying a 10 percent insurance premium.
The Kilimo Salama system includes weather stations in each agricultural region that measure rainfall and other climate information. These stations compare against historical norms and when measured conditions fall below that which is necessary for farming, the service automatically pays insured customers in that region. The payouts occur through Safaricom’s wildly popular mobile money service, M-PESA.
Although the scheme is very new, thousands of farmers have signed up. As a method for lowering the costs of insuring small farms, Kilimo Salama shows great promise. That said, affordability and trust remain obstacles, especially if farmers dispute the payouts from the system.
For more information, see the IFC case study or the Kilimo Salama webpage. This highlight was drawn from Anytime, Anywhere: Mobiles Devices & Applications and Their Impact on Agriculture & Rural Development.