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!