GlobalGiving.org: Protect and Invest in Farmers from Ghana

Using surveys and pilots to prepare for 2012

Lindsey Shaughnessy — Tue, 27 Dec 2011 20:59:18 GMT

Greetings from Tamale, Ghana! At the time of our last update, the Examining Underinvestment in Agriculture (EUI) project had finished marketing rainfall-indexed insurance to smallholder farmers in northern Ghana, and had measured high demand for the product. The EUI project is currently preparing for the next year of the project, with a full set of activities which include: conducting an insurance product satisfaction survey; preparing to conduct a comprehensive household survey of all respondents; making plans to again market a commercial index insurance product to farmers; and wrapping up a pilot study on fertilizer technology.

The project is currently conducting a short survey with those farmers who purchased the Sanzali insurance product this year in order to measure rainfall perception, product knowledge and product satisfaction. Results of the survey will inform the Ghana Agricultural Insurance Programme and Ghana Insurers Association as they develop a commercial index product to market ahead of next year’s agricultural season. Following the product satisfaction survey, the project will conduct a comprehensive, four-hour household survey with all respondents to measure the effects of insurance on areas ranging from agricultural input use and yields to household financial flows and consumption. This is very exciting, as it means that many more people may be able to access rainfall insurance in years to come.

The project is also completing activities related to a small pilot study on fertilizer technology conducted with fifteen smallholder farmers living within the EUI project area. Farmers were provided with commercial organic and inorganic fertilizers and an open-pollinated maize seed variety, as well as provided with extension advice about recommended input packages. Results from the fertilizer technology pilot will help to inform decisions about testing combinations of rainfall-indexed insurance with agricultural technology packages in the future.

As usual, we thank our donors for making such remarkable progress possible. And we wish you all a very wonderful 2012 as we, too, prepare for the new year.

High Demand for Rainfall Insurance

Lindsey Shaughnessy — Wed, 07 Sep 2011 20:32:46 GMT

The results are in: high demand for rainfall insurance in northern Ghana

Greetings from Tamale, Ghana! At the time of our last update, the Examining Underinvestment in Agriculture (EUI) project was gearing up to market insurance to maize farmers in northern Ghana. Preparations included working with the Ghana Insurers Association, Ghana National Insurance Commission, and the Ghana Agricultural Insurance Programme to secure authorization to market the country’s first commercial drought-indexed insurance product.

IPA built on previous years’ experience marketing insurance to maize farmers in northern Ghana to develop a plan for reaching 1,100 farmers this year. IPA named the product Sanzali, the local word for drought, in order to underscore the fact that the product insured against drought. The project team trained insurance marketers, developed marketing scripts for a largely illiterate farmer population, made community entry, and made individual marketing visits to randomly selected farmers from the study sample. The script sensitized farmers to insurance, and provided information about the policy, real-world examples, costs, benefits, and timelines, and allowed for substantial question and answer sessions.

Those farmers who elected to enter into formal insurance contracts with GAIP were able to sign by signature or thumbprint and to pay in cash, and later received official certificates noting their personal information and insured acreage. Throughout the marketing process, the project team closely audited activities to ensure transparency, fairness and compliance.

Because Sanzali was offered, as part of a study, it was offered at three different prices: discounted, actuarially fair, and marked-up. After marketing activities were completed, IPA analyzed demand and found it to be high. Around the Tamale Metropolitan and Savelugu-Nanton districts, 89 percent of targeted farmers were reached for an initial marketing visit, and 50.8 percent of those farmers opted to purchase Sanzali. Demand was 70 percent at the low price, 56 percent at the fair price, and 37 percent at the high price.

In the more rural West Mamprusi district, 89 percent of farmers were reached for the first marketing visit, and 90 percent of those farmers opted to purchase Sanzali! Demand was 93 percent at the low price, 89 percent at the fair price, and 86 percent at the high price.

These results are interesting to the nascent agricultural insurance industry in Ghana, and also to relevant stakeholders such as farmers, agricultural ministries and NGOs, and academics. The project team and the farmers in our study appreciate your interest in and support of this project!

An insurance product called Sanzali...

Lindsey Shaughnessy — Fri, 27 May 2011 05:36:04 GMT

A Sanzali marketer collecting a premium

Greetings from Ghana’s Northern Region! The Examining Underinvestment in Agriculture team has been very busy since our last update in January. We have completed our brief harvest survey as well as a more comprehensive follow-up survey, and are now marketing a new, commercial insurance product on behalf of the Ghana Agricultural Insurance Programme. Starting with the most recent, here are some highlights from the project:

Currently, the country of Ghana is making an effort to develop the agricultural insurance sector through the Ghana Agricultural Insurance Programme. Based on IPA’s experience marketing insurance to farmers in the past, major stakeholders in the country have enlisted IPA to market a new, commercial insurance product to its sample of smallholder farmers in the Northern Region. The product, indexed to drought measurements as recorded at rain gauges operated by the Ghana Meteorological Agency, has been designed in stages with varying maize sensitivity in mind. Teams of IPA-trained marketers are currently educating 1,100 farmers about the new product, called “Sanzali”, the local word for drought, and collecting premiums from those farmers who wish to purchase coverage for their farms.

In February and March, IPA conducted a second, comprehensive follow-up survey with 1,360 households in order to help determine what effect the treatments have had on agricultural yields and profitability, as well as on farmers’ decision-making and socioeconomic well-being. Specifically, the survey included in-depth questionnaires on household members, education, health, waged labor, formal employment, plots, land tenure, seeds, chemical inputs, agricultural labor, harvest, crop sales and storage, livestock, fishing, agricultural processing, assets, expenditures, social networks, borrowing, lending, savings, other income, transfers, and consumption. Researchers are currently analyzing this data and will disseminate findings in the coming months.

In January 2010, IPA analyzed the results of the harvest survey mentioned in our last update. The harvest survey was meant to inform the project and other stakeholders of farmers’ understanding of last year’s insurance product, as well as to provide a clearer picture of the risks farmers face. While 97 percent of farmers indicated a desire to purchase rainfall insurance again next year, just 41 percent of those who received a payout under Takayua considered it sufficient to cover damages sustained, and 66 percent of farmers who received a payout reported that the payout came at a good time. Farmers reported the majority of damage was caused by excess rain, and mainly during the flowering period of growth. 82 percent of farmers were able to identify the reason they had received a payout, while 64 percent correctly identified their rain gauge without prompting.

In our next update, look for analysis on all of the above – including information on 2011 take-up rates for Sanzali, and on analysis of data collected about farmers through the follow-up survey!

Insurance payouts and knowledge surveys in Tamale

Ruth Damten — Mon, 24 Jan 2011 17:18:42 GMT

Post-harvest survey in action

Greetings from Tamale! We hope that you are staying warm wherever you are and want to thank you again for your generous contributions to, and interest in, our work. Since we last wrote in September 2010, we've offered additional insurance payouts and continued to progress in our data collection and product improvement. In fact, we're gearing up for a follow-up survey that will launch the first week of February! Here are some highlights from the last few months:

Following the first payout in September, the project made a second insurance payout in October, also based on excess rainfall measured during the 2010 farming season. The Walewale Rainfall Station, one of the five rainfall stations used to collect data under the 2010 Takayua Rainfall insurance policy, attracted a payout. The station recorded eleven (11) consecutive wet days occurring between the 30^th of August and the 9^th of September. According to the Takayua Rainfall Insurance Policy, eleven (11) consecutive wet days attracts GHC 50.00 (USD $32.85) per acre. Because 225 farmers assigned to the Walewale station had insured a total of 1,254 acres, the total payout amounted to GHC 62,700.

This second payout has further strengthened the trust that these farmers have in the rainfall insurance product offered by IPA. Despite heavy rains and flooding having cut off farmers in most communities around Walewale, IPA surveyors crossed the floodwaters to distribute the payouts to very grateful policyholders.

During November, the project team designed a survey instrument to be used to conduct a short (ten minute) post-harvest product knowledge survey. The survey was administered in December 2010 to all farmers who were insured by the Takayua Rainfall Insurance Policy during the 2010 farming season. The aim of the post-harvest survey was to collect product knowledge data to be used during the evaluation and modification of the Takayua Rainfall insurance product for 2011. IPA has made farmers’ needs a priority, and hopes that the product knowledge survey will further strengthen our partnership discussions with local insurance companies about eventual scale-up of the insurance product.

An interviewer inquires about insurance usage

An update from Tamale

Ruth Damten — Mon, 18 Oct 2010 14:46:10 GMT

Hakeem, braving floods to make an insurance payout

An update from Tamale

We are excited to share some results of the first year and information on current activities taking place in agricultural communities in northern Ghana. When Rob last wrote, the 2009 agricultural season was starting and IPA was getting ready to support farmers by offering rainfall insurance and grants of capital. During that season, 260 farmers were offered free rainfall insurance, and take up was 100%. 235 farmers received grants that were delivered to them throughout the farming season (and based on their own personal planting schedule) to assist with agricultural investments. Other farmers received free insurance plus capital injections.

Some preliminary results from the February 2010 follow-up survey indicate that farmers who received both insurance and capital spent 47% more on fertilizer. They also cultivated 23% more land and they increased the proportion of hired labor. Having both capital and insurance has impacted the farmers’ expenditures and savings as well. These individuals were 23% more likely to have electricity in the house than the control group, and 9% more likely to have a formal savings account.

The farmers who received rainfall insurance spent 11% more on fertilizer, and they cultivated 26.5% more land. Furthermore, farmers who received insurance missed fewer meals and sent their children to school more frequently.

During the most recent agricultural season, 729 farmers were offered rainfall insurance and, again, take-up was quite high at all insurance rates offered. 363 farmers received capital injections of GHC 350.00 each.

Under the rainfall insurance policy, one out of the five rainfall stations (Pong Tamale Rainfall Station) attracted a payout. The rainfall station recorded eight consecutive wet days from the 7^th to the 14^th of August 2010, so all farmers insured under this station will receive a payout of GHC 20.00 per acre. There are 125 farmers who had insured their farmlands under the Pong Tamale Rainfall Station, for a total of 785 acres insured.

Currently, we are conducting a series of focus groups to learn more about what specific technologies are the most useful for farmers and what barriers they face to adopting them. Our efforts to form partnerships with local insurance companies for eventual distribution and scaling of the insurance product continue, and we remain optimistic about the impact of rainfall insurance on farmers in the region.

A farmer's insured maize crop

A postcard from Protect and Invest in Farmers from Ghana

Sheila Leonard — Wed, 14 Oct 2009 21:18:33 GMT

On June 5 I visited farmers in the small towns surrounding Tamale, the northern region of Ghana which is more desert-like than its lush neighbors to the south. The purpose of this project is to bring farmers out of subsistence farming and protect them from weather calamities. IPA is testing whether farmers will invest more in their farms if they have access to capital or insurance. We visited ten farmers – half who were receiving insurance money and half who were receiving capital, not based on rain. The insurance schedule is as follows: during the rainy season which is June, July, August, and September, farmers receive insurance money if there are 18 or more days of rain or 8 or less days of rain. The amount is based on their acreage and the number away from 18 or 8. It encourages people to produce on a greater scale in order to move away from only subsistence farming. The rains are late coming and the city is dry, hot, and agitated. The end of May is already late, but beginning of June – June 5th even and no rain? Too, too late. As we plod through each village, sweating profusely and searching for some shade – the IPA team and I all just look at each other, waiting for the heat to break and the rains to fall, and for mother nature to help these families out. The stark difference between the power of climate control in my life and the dependence on nature in Tamale is astonishing, how controlled my life is from the realities of nature.

In this visit in particular I felt like I met people who the organization was really reaching. Often my visits coincide with a song and dance about the Great Westerner granting the Lowly NGO a visit. But here, we went straight to farmers and they just looked so tired. Many NGO workers end up being the best paid members of a community, but agriculture is the largest employer. These farmers were unmoved by white people’s presence and just looked like – hey, I’m trying my best here, can you let me go do it now?

I’m eager to learn about IPA’s results – whether capital or insurance helped farmers produce more, or if they use the money for other needs outside of farming. Their experiment is run by an incredible project leader (Rob from England) who worked diligently to protect the purity of their experiment, engage with the community, and successfully obtain scientific direction on how to help agriculture in developing countries. I wish the team and farmers luck and if you have any questions feel free to comment!

Spring Update

Rob Fuller — Fri, 15 May 2009 19:58:00 GMT

IPA enumerator Joseph Banyan interviewing a farmer in Tamale

Farmers in northern Ghana sometimes struggle to grow enough food each year for their families to thrive. But many believe that these farmers could prosper if only they could afford to invest more, and if they did not face such risks from unpredictable rains. IPA is helping nearly 400 farmers to invest more this year by providing capital injections, as well as an innovative rainfall insurance scheme.

Supported by donations like yours, IPA has been distributing capital injections to farmers since mid-April this year. The grants are being given out according to each farmer’s personalized timetable, so that the funds are received when they are needed most. We’ve also awarded many of these farmers rainfall insurance to protect them from drought and excess rain: this takes effect at the most critical time of the growing season, from June to September.

“Being introduced to IPA’s rainfall insurance policy really opened our eyes to the risks we face as farmers.” – farmer in Savelugu-Nanton district, Ghana

This year is just the start for IPA’s work with farmers in northern Ghana. Please help us to expand our capital injections and insurance program to more farmers next year. And let us know what you think by leaving feedback in our comments section!