Oromia Insurance Company (OIC) S.C. paid a claim of 525,000 Br for 300 farmers in Oromia following crop failure related to the ongoing drought.
The claims were paid at a ceremony in Ziway town on October 23, 2015, with beneficiaries coming from Kemo Gerbi and Desta Abiyata kebeles of Adami Tulu in Gedo Kombolcha wereda, Eastern Shewa, Oromia Regional State. This insurance policy is part of a programme under the Ministry of Environment, Forest & Climate Change, which is funded by the United Nations Development Programme (UNDP). UNDP has paid a 300 Br premium to OIC for the farmers of these two kebeles for 2015.
Kemo Gebi had rainfall shortage during the 2015 Belg – short rainy sowing season around March; while Desta Abiyata had faced shortage during Belg and later during the flowering period, according to OIC’s assessment.
“We have covered for the crop failure recorded on both Belg and Meher seasons in these two areas,” said Daniel Negassa, head of OIC’s Micro-insurance Department.
In Kemo Gerbi, where around 750 people live, only 150 people are covered by the insurance scheme. One of the claimants, Bonasi Tiglu, was paid 3,000 Br, although he says he lost his crops of wheat, maize and black eyed peas he was growing on nine hectares of land, which he claims to have cost him 55,000 Br for seeds and fertiliser.
“Though the money is not too much in comparison to the amount of money I lost because of the drought, at least I can use it to purchase feed for my cattle,” Bonasi Tiglu, commented, as he described the situation for Fortune.
The insurance product does not include site visits for loss verification because it would be too labourious, Daniel said.
The company works with the National Meteorology Agency’s (NMA) branch offices at the area in order to obtain the data showing rainfall levels. In addition it also uses satellite data to make sure that the agency’s reports are accurate, according to Daniel.
Claims paid to farmers according to the assessments made, ranged from 500 Br to 3,000 Br. Payments were made through Meki Batu Fruit & Vegetables Growers Cooperative Union. The claims this year were higher than the past years. There was a time when the OIC paid no claims because there was no problem, Daniel disclosed.
The OIC is preparing to pay crop and livestock claims for almost 2,500 farmers that mostly live in the Rift Valley area in East, North and Central Shewa. These farmers also have 1.5 million shares in the company through their cooperatives. Another round of payments will also be made for farmers in Borena area.
OIC started crop and livestock insurance coverage in Oromia in 2010. According to its 2013/14 report, the claims paid in these schemes have been increasing from 2010/11 up to the last fiscal year, 2014/15. Last year the company paid 1.4 million Br. in insurance claims.
There are going to be a lot of claims paid this year and the figure will definitely increase, Daniel told Fortune.
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