Ghana's Push for Agricultural Insurance Fund Gains Momentum
Participants at the July 27, 2023 workshop, which explored global best practices in agricultural insurance.
Ghana's agricultural sector contributes the lion’s share of the country's economy, providing employment and livelihoods for nearly 40 percent of the population. Despite its importance, this critical sector remains susceptible to droughts, excessive rainfall, floods, wildfires, and other potentially devastating events brought on by climate change.
Enter agricultural insurance. This vital product can help farmers, especially smallholder farmers, manage climate-related risk factors that ultimately affect food production and security.
In April 2023, the Feed the Future Ghana Policy LINK Activity organized a stakeholder validation workshop to prioritize and strategize the implementation of policy recommendations captured in the activity’s September 2022 Agricultural Lending Assessment. Creating an Agricultural Insurance Fund (AIF) was one such priority.
Evelyn Rose Debrah of the Ghana Agricultural Insurance Pool (GAIP) contributing to discussions at the workshop.
The National Insurance Commission (NIC) and Policy LINK have since initiated steps that will lead to structuring and operationalizing an AIF for the country. On July 27, 2023, the NIC and Policy LINK jointly hosted key actors from the agricultural sector, the insurance industry, government departments, and donor agencies to explore global best practices in agricultural insurance that will serve the best interests of farmers in Ghana.
The Ministry of Food and Agriculture (MoFA) presented on the need for insurance for the enhanced Planting for Food and Jobs (PFJ) program while the Ghana Agricultural Insurance Pool (GAIP) presented on Ghana's journey so far and challenges with agricultural insurance. For its part, the Policy LINK team shared international best practices in agricultural insurance. These presentations were followed by an interactive discussion among participants, which birthed valuable insights and perspectives on moving forward.
Mr. Kofi Andoh, the Acting Commissioner of Insurance at the NIC, acknowledged the substantial demands of agricultural insurance as a capital-intensive endeavor. However, he emphasized that introducing the AIF will be a significant stride toward fostering sustainable agriculture He praised the collective efforts of stakeholders for their resourceful suggestions and unwavering commitment to ushering in affordable and sustainable insurance coverage for the agricultural landscape.
On behalf of Policy LINK, Mr. Yunus Abdulai, the Country Lead, pledged the activity's continuous support to the NIC and other stakeholders to see this venture to a fruitful end.
"Policy LINK is facilitating the process to support the NIC to see to the realization of this structuring of the fund, and we will continue to provide technical assistance to stakeholders to generate the needed data to effectively support the agricultural insurance sector," he said.
With the global demand for food said to increase by 70 percent by 2050, the World Bank estimates that at least $80 billion annual investments, most of which need to come from the private sector due to limited public resources, will be needed to meet this demand. Agriculture finance will, therefore, significantly empower poor farmers to increase their wealth and facilitate the development of sustainable food value chains.
Resources
Ghana Agricultural Lending Assessment
Improving Agricultural Lending in Ghana: Policy LINK Engages Stakeholders