Recently, Zambia celebrated Farmer’s Day to honor the hard work and contributions of farmers in the country’s agricultural sector. Hollard emphasizes the importance of ensuring farming sustainability by offering adequate disaster risk financing to protect farmers from natural and man-made disasters.
Choolwe Sianyinda, COO of Hollard, states, “The future of Zambia’s agricultural sector and the country’s socio-economic development depend on having sufficient cover and protection against the unpredictable weather patterns caused by climate change, which puts extra pressure on food security.”
Zambia’s socio-economic progress is closely tied to the agricultural sector, which employs 51% of the labor force and feeds 50% of the population. The sector, primarily through smallholder production, plays a significant role in providing raw materials for manufacturing and food processing industries, creating job opportunities especially for women and youth.
According to the African Development Bank Group, agriculture is crucial for Zambia’s export earnings and offers a pathway for the country’s diverse socio-economic transformation. However, climate change poses a significant challenge to agricultural development in Africa, impacting food security and productivity.
Hollard believes that inclusive and sustainable insurance solutions are key to ensuring the long-term sustainability of the agricultural sector. Collaborating with financial institutions to provide credit to farmers, with insurance as a safety net, can enhance farmers’ resilience and protect their livelihoods.
Agriculture insurance plays a vital role in risk mitigation, enabling farmers to safeguard their businesses from financial losses. While commercial farmers rely on indemnity-based insurance, smallholder farmers access index insurance to protect their crops.
Hollard, as a member of an insurance consortium, provides insurance coverage to over a million smallholder farmers through the Farmer Input Support Programme (FISP). They also collaborate with Financial Sector Deepening Zambia (FSDZ) to introduce an Inclusive Crop Insurance Scheme, offering Area Yield index to support smallholder farmers.
Looking forward, Hollard aims to expand partnerships with organizations and funders to integrate insurance into agricultural practices, enhance accessibility for farmers, and support their transition from subsistence to commercial farming.
The World Bank forecasts the increasing food insecurity in sub-Saharan Africa, emphasizing the urgent need for the agricultural sector to adopt insurance. Insurance is not just a luxury but a necessity for the sector’s viability and its crucial role in Zambia’s economy.
Despite the current challenges like drought, insurance can serve as a crucial safety net for farmers, enabling them to create better futures and thrive in the face of disasters.