The National Insurance Commission (NIC) has signed a memorandum of understanding with Policy Link – a global Feed the Future programme aimed at enhancing leadership and collaboration in the agricultural sector – to operationalise the Agricultural Insurance Fund (AIF), which seeks to provide risk management for farmers in Ghana, particularly smallholder farmers. The AIF has been established to cover various risks confronting farmers in Ghana. These include unpredictable weather patterns and climate-related risks such as droughts, excessive rainfall, floods and wildfires, as well as pests and diseases – all of which threaten food production and security in Ghana.
With funding support from the United States Agency for International Development (USAID) Mission in Ghana, Policy Link supports government and policy actors such as the Ministry for Food and Agriculture, NIC, the private sector, farmer-based organisations and groups, civil society, the media and others as they implement evidence-based inclusive development processes within the agricultural sector.
Agricultural insurance is a key component – alongside micro-insurance – of the inclusive insurance agenda that has been put on the front-burner in Africa, with Ghana taking a leading role.
Speaking at the MoU signing, Joan Abdulai, Policy Link’s Country Leader for Ghana, noted that agriculture provides livelihoods for 40% of the country’s populace and contributes about one-fifth of its gross domestic product. He asserted that agricultural insurance is a key solution for overcoming the risks challenging farmers in the country, saying: “This essential product can empower farmers, especially smallholder farmers, to effectively manage climate-related risks; thus, safeguarding food production and security”.
As an activity organisation championing the use of evidence in decision-making and stakeholder collaborations, Policy Link undertook an agricultural-lending assessment in September 2022. Subsequently, a stakeholder workshop was held in April 2023 that validated, prioritised and strategised the implementation of policy recommendations captured in the assessment.
“Stakeholders were united in prioritising operationalisation of the Agricultural Insurance Fund,” explained Abdullahi, noting that: “As you may all know, current premiums on agricultural insurance are above the reach of many smallholder farmers, who are the backbone of Ghana’s agricultural activities.”
Subsequent to these stakeholder engagements, NIC and Policy Link have been actively working alongside other stakeholders on supporting the process to structure and operationalise the AIF to subsidise agricultural insurance premiums.
Enthuses Abdullahi: “The partnership between Policy Link and NIC will enable us to leverage our respective technical and logistical resources toward operationalising the AIF. We have already made good strides together, and by this MoU we are taking more significant steps to enhance our agricultural sector and ensure a more secure future for our farmers and the nation”.
Welcoming the MoU signing, Ghana’s acting Commissioner for Insurance and CEO-NIC asserted: “The AIF’s establishment represents a significant step toward finding innovative solutions that offer financial protection to those who feed the nation. The Fund will serve as a crucial safety net for our agricultural community, providing them with much-needed resilience to bounce back from the setbacks they may encounter.
“It is a testament of our commitment to inclusivity, inclusivity, sustainability and the wellbeing of our farmers. It will also give confidence to farmers, aggregators and other players in the value chain to invest in modern farming techniques, purchase high quality inputs and expand their agricultural activities, thereby contributing to increased productivity.”
He acknowledged the need for Policy Link’s expertise and support, due to the complexities of creating and managing the AIF, commending its track record of technical capacity and accomplishment. “This MoU cements our collaboration with Policy Link Ghana, and I am confident that it will yield significant results for our agricultural sector,” he enthused. “It is a reflection of our shared commitment to improve the lives of our farmers, promote sustainable agriculture and enhance food security. Together, we will work diligently to ensure the AIF is not just a concept on paper but a tangible lifeline for those who till the soil day-in and day-out to feed the nation.”