A main challenge facing East African dairy farmers, who have opted for cross bred or exotic animals, is the ease at which these animals die due to hunger, diseases or other factors. Consequently, compared to the hardy indigenous animals, many a farmer considers the cross breeds and exotics a liability. This not only slows down adoption of technologies to stimulate dairy production, but also limits the income farmers can make from milk. It is a new dawn, as farmers within East Africa Dairy Development stable and indeed across Kenya will benefit from a new animal insurance launched in the country. In partnership with Syngenta Foundation and UAP insurance, EADD project-Heifer International launched the product in Tanykina dairy in Kipkaren Nandi County in North Rift of Kenya. dividends
In the roll out, 32 pioneer EADD farmers hedged their dairy business against risk with the newly introduced Kilimo Salama livestock insurance scheme. With as little as USD 1.4 (117 KES) per month, they can insure their best cows from loss. The innovative low-cost livestock insurance aims at protecting small dairy farmers against losses resulting from death of their cows. The unique package combines insurance with cow care ensuring that dairy cows are protected from ticks, worms, and malnutrition. Farmers can buy a one-year cover for 3.5% of the value of each animal. Importantly, they are also required to purchase an animal care package consisting of tick control, deworming, vaccines, and minerals. This is intended to ensure that farmers do not lose their cattle to common and preventable diseases.
In this case, Tanykina Dairy Cooperative will pre-finance the premiums and then deduct the amount owed from farmers’ milk deliveries through their existing internal credit structure. The yearly cost of the premium for an average high-yielding cow valued at Ksh. 40,000 (460 USD) is Ksh. 1,400 (16 USD). A care package costs an average of Ksh. 4,200 (48 USD), which is paid for in quarterly installments of about Ksh.1,050 (12 USD). If an insured cow dies, the farmer calls the Kilimo Salama helpline and a call center agent dispatches a veterinarian to verify the cause of death. The insurance payout is sent by UAP Insurance Company to the cooperative Financial Services Bank, which then deposits it into the farmer’s bank account. The farmer can then buy another productive cow, this ensures he continues making income from milk.
Farmers are delighted. Tall, energetic and athletic 50 year old Lenah Jecpkoech Rop is one of the 32 farmers. As she heartily serves us a mug of soar milk, she asserts that all visitors to her home must have a mug of soar milk before they depart. This act of generosity is not done grudgingly but heartily, because she can afford it. She knows she is covered, even if East Coast Fever (ECF) strikes the region again, “If this happens again (God forbid) and my cow is affected, I will just dial UAP help line for a replacement.” ECF is a leading cause of animal losses with high economic implications. An upbeat Tanykina Dairy Plant manager, Mr. Jeremiah Ruto summarized the feelings and vision of the member farmers; “This insurance product is a game changer in the dairy industry. It will ensure that we sustain our milk collection at more than 30,000 kilos per day, because farmers will no longer be drawn back for losing their best producing cows to accidental death.” Underscoring the importance of the insurance, Ruto said that the North Rift region was prone to many but preventable diseases such as East Coast Fever, Foot and Mouth Disease and Milk Fever. Mr. Ruto confirmed that the scheme had rolled out to farmers in Kipkaren and Surungai areas, but would be expanded by the end of 2013, to serve all qualifying farmers who have been supplying milk to Tanykina Dairy Plant Limited for at least three months.
Heifer International, Kenya, Country Director, Mr. Alex Kirui hailed the initiative, saying “Creating sustainable linkages with service providers such as insurance firms and other financial institutions is one of our major goals. The dairy cow insurance therefore is an exciting development because it will help farmers protect their business against risks that threaten their livelihoods. We see tremendous potential for the cover to reach over 125,000 farmers in 21 partner cooperatives in Kenya.”
According to Kirui, farmers within EADD partnership own nearly 700,000 cows, with an estimated worth of USD 50 million.
In a recent study in Zambia, the implementation of a similar animal care insurance package reduced annual mortality rates dramatically, from 22% to 1.6%, as a result of a drop in preventable diseases and overall improved animal health.
Reported by Tom Ngare (for East Africa Dairy Development Project)