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Co-op Bank roots for agriculture insurance to cushion farmers

Despite its immense contribution to the economy, the sector faces myriads of challenges, which range from unpredictable weather patterns to market fluctuations, the risks are present threatening livelihoods and food security

Cooperative Bank of Kenya has urged farmers to take its financial products that aim at cushioning them against the myriads of challenges facing them.

Agriculture is the backbone of Kenya’s economy, but it is exposed to various risks and highly dependent on the weather, which insurance can help reduce for households and enterprises.

“At Co-op Bank Kenya we tailor make financial solutions to all players across agricultural value chains including coffee, tea, dairy, horticulture, and dry cereals,” the bank says.

The bank says agriculture plays a critical role in the country’s Gross Domestic Product (GDP) and indirectly contributes 27 per cent through its linkage with other sectors. It also worth noting that the sector contributes to at least 65 per cent of Kenyan’s export earnings, with horticultural exports being among Kenya’s key agricultural exports.

However, despite this immense contribution to the economy, the sector faces myriads of challenges, which range from unpredictable weather patterns to market fluctuations, the risks are present threatening livelihoods and food security.

Agriculture insurance can help reduce the vulnerability of both women and men, households and enterprises that work in agriculture, by providing protection against crop losses due to natural disasters, such as drought, floods, hailstorms, pest attacks, disease outbreaks, and other events that can damage crops or livestock. Agriculture insurance is a relevant mechanism to manage risks to help farmers to avoid financial losses and keep their businesses running.

It aims to reduce the financial risk and uncertainty faced by farmers and help them manage their production and income more effectively. Insurance has become even more important as extreme weather events and climate change have increased the risks and uncertainties of farmers and agriculture-based enterprises. By reducing the financial risks associated with farming, agriculture insurance can help to promote stability and growth in the industry.

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