Kenya: Tobacco Farmers Oppose Crop Insurance Cover Over Exploitation Fears

Source from:  Business Daily 04/23/2010

A group of farmers have opposed a crop insurance scheme being marketed by BAT and UAP insurance, saying they feared it was meant to exploit them. The companies say the scheme is meant to cover farmers against adverse weather effects, pests and diseases but the growers, led by Labour assistant minister Sospeter Ojaamong, said it would leave the farmers poor. Mr Ojaamong, who is also the Amagoro MP, said many tobacco farmers are disgruntled due to poor earnings. He blamed tobacco companies for exploiting farmers when it comes to the grading of tobacco and setting prices for their harvested produce. "In an effort to pay farmers lowly for their produce, some companies deliberately manipulate the quality of tobacco once it reaches the factory. This has to stop," he said. Mr Ojaamong said that he would not endorse the insurance cover before the farmers were educated on how it works. "Take them through the insurance cover first. Some insurance companies are never straight forward and it's important for them to know what the insurance policy entails," said Mr Ojaamong. The minister however, said insurance schemes were good when the beneficiaries were aware of what they were being enlisted for. The MP also faulted the lack of a tobacco processing farm in Bungoma and Teso districts, which are the main producers of the crop. But, UAP head of marketing and distribution Joseph Kamiri said the scheme stood to benefit farmers who have been incurring losses whenever their crop was affected by unfavourable weather patterns. Mr Kamiri said the response was satisfactory and revealed that out of 5,000 farmers contracted by BAT Kenya, some 1,000 tobacco farmers have registered with the insurance scheme since it was started last year. He said they expected the number to increase as more farmers become aware of the benefits of the insurance scheme. "Farmers will pay a premium of 5.5 per cent and we shall compensate them up to 70 per cent of what they loss as a result of drought, hailstones or other effects of adverse weather," said Mr Kamiri. Mr Kamiri said the insurance scheme targets contracted farmers in Migori, Meru, Embu and Malakisi. Enditem