A new insurance initiative has been launched by the Agro Consortium (U) Ltd (AIC) and The Grain Council of Uganda (TGCU) in a bid to bolster agricultural financing and risk management for large-scale farmers in Uganda.
The initiative which supports the government-backed Large-Scale Farmers Financing Scheme (LSF) will provide comprehensive insurance coverage to large-scale farmers, ensure affordability and accessibility of agriculture insurance, enhance financial stability for both farmers and lenders and offer protection against climate-related hazards, including drought, excessive rainfall, and natural disasters.
John Makosya, the Chief Operations and Impact Officer at Agro Consortium said the initiative aims to de-risk agricultural financing, enabling farmers to invest confidently in their operations without the constant fear of financial loss due to unpredictable weather or pest outbreaks.
“Agriculture insurance is a transformative tool for large-scale farmers. Our goal is to revolutionize insurance practices, ensuring that farmers are protected from the moment seeds are planted until harvest. At the Agro Consortium, we are committed to building a resilient and innovative agricultural sector,” Makosya said.
“ Education and advocacy are central to our mission, which is why we incorporated a training workshop in the launch to educate farmers on risk coverage, claims processes, and policyholder responsibilities. The future of Ugandan agriculture lies in resilience and innovation, and together, we aim to build a sector that not only feeds the nation but also drives economic growth and sustainability.”
Agriculture remains Uganda’s backbone, contributing 24% to the country’s GDP and employing about 70% of the population.
However, over 80% of Ugandan farmers rely on rain-fed agriculture, making them highly vulnerable to climate change-induced risks such as droughts, floods, and pest infestations.
Despite these challenges, the uptake of agricultural insurance remains low. A 2021 report by the International Food Policy Research Institute (IFPRI) found that only 4.8% of farmers adopted crop insurance during the main planting season.
Robert Mwanje, the Chairman of The Grain Council of Uganda, highlighted the significance of this partnership.
“As a farmer, I understand firsthand the challenges of unpredictable weather, pests, and financial insecurity. The LSF aligns with Uganda’s broader agricultural development goals, including enhancing food security, reducing borrowing costs, and promoting sustainable farming practices. The government’s support in de-risking agriculture insurance is crucial, as it creates an enabling environment for financing and lowers borrowing costs for farmers,”Mwanje said.
“ This partnership with Agro Consortium is a lifeline, helping farmers safeguard their investments and livelihoods. It’s time to shift from uncertainty to solutions that build resilience and profitability for all involved.”
According to the Agro Consortium’s John Makosya , the success of the LSF would depend on continuous collaboration among stakeholders, including financial institutions and farmers themselves.
“Our goal is to build a sustainable agricultural system that encourages commercial-scale production and provides farmers with a stable financial environment. However, farmers must embrace agricultural insurance to fully reap its benefits,” he said.
