Protect and Invest in Farmers from Ghana

by Innovations for Poverty Action
Main road leading to Tamale during the dry season
Main road leading to Tamale during the dry season

Greetings from northern Ghana, where the rains have finally begun to fall! The Examining Underinvestment in Agriculture (EUI) project is currently involved in a number of exciting initiatives, including continued marketing of drought insurance and development of a new, community-based mobile agricultural extension system.

First, insurance: the EUI project has once again partnered with the Ghana Agricultural Insurance Programme (GAIP), Ghana Insurers Association (GIA), National Insurance Commission (NIC) and Swiss Re to market a commercial drought index insurance product to smallholder farmers in the region. For new readers, this means that we can offer a relatively low-priced insurance product to farmers because drought payments are automatically triggered based on rainfall readings recorded by the Ghana Meteorological Agency here in the Northern Region—requiring no claims officers and offering no opportunity for moral hazard. In the past, we saw that there was a very high demand and this is a unique, and exciting, partnership that allows us to offer this product throughout the region.

Farmers here face a clear risk when considering their rain-fed farms as an opportunity for investment and profit: if rainfall levels are low, they risk losing their farm investment in inputs and labor. The drought index insurance product offered by EUI and GAIP is meant to alleviate some of the risk associated with smallholder farming in Ghana, and the EUI study measures farmers’ responses to access to insurance. At our next update, we’ll provide numbers on demand and some ideas for scaling up availability of rainfall insurance.

As mentioned earlier, we’re also working with the Ministry of Food and Agriculture to develop an innovative approach to providing agricultural extension services to farmers, by providing specially appointed community members with mobile phones loaded with easily-updated agricultural information. This pilot is in the early stages – more details to come!


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.

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!

A Sanzali marketer collecting a premium
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!

Post-harvest survey in action
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 30th of August and the 9th 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 interviewer inquires about insurance usage

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Organization Information

Innovations for Poverty Action

Location: New Haven, CT - USA
Website: http:/​/​
Innovations for Poverty Action
Project Leader:
Heidi McAnnally-Linz
New Haven, CT United States

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