A tale of two harvests

In May 2024, Martha Waema, a 62-year-old farmer in Machakos County, stood in the three-acre plot she had farmed for 38 years and watched it disappear under floodwater. She and her husband had invested roughly KSh 80,000 in maize, peas, cabbages, tomatoes and kale, expecting a return of around KSh 200,000. The rains that season were the heaviest “short rains” East Africa had recorded in years, part of an El Niño-driven deluge that submerged farmland across 33 of Kenya’s 47 counties, destroyed crops on close to 168,000 acres, and affected an estimated 400,000 people. “I have never encountered losses of this magnitude,” she said.

About 200 kilometres away, in Olokirikirai, 65-year-old farmer James Tobiko Tipis watched the same rains fall on his 16-acre farm — and walked away largely unscathed. He had spent the previous seasons terracing his land and planting cover crops, anticipating exactly this kind of shock.

Tipis’s story is about preparation through farming practice. But across Kenya, a quieter version of the same story is playing out through a different kind of preparation: insurance. Two farmers, same rains, very different outcomes — and the difference often comes down to a decision made months before the clouds gathered.

The cost of going in unprotected

Climate volatility in East Africa is no longer an occasional disruption — it is becoming the operating environment. Kenya’s National Agricultural Insurance Policy notes that the frequency of severe droughts in the country has shifted from a 5–7 year cycle to a 2–3 year cycle. The 2008–2011 drought alone is estimated to have cost the Kenyan economy around KSh 968.6 billion, with livestock losses accounting for the bulk of that figure.

More recently, the 2022 drought — described as one of the worst in 40 years — killed an estimated 2.5 to 2.6 million livestock and caused losses valued at roughly KSh 11 billion, concentrated in the arid and semi-arid lands. Then, in a cruel reversal, the El Niño floods of late 2023 and early 2024 destroyed entire maize and rice harvests in breadbasket regions such as Baringo and Mwea, with the flooding of just 2,000 acres of the Mwea Irrigation Scheme alone resulting in an estimated KSh 60 million in lost crop.

For farmers without cover, these are not abstract statistics — they are the difference between staying in business and starting over. Industry experts describe a familiar and devastating sequence: a farmer loses a season’s crop or herd, depletes savings to survive, sells productive assets such as land or breeding stock to cover debts, and in the worst cases pulls children out of school because there is no income to pay fees. A single bad season, without a safety net, can erase years of progress and push a household from food security into poverty. And because droughts and floods are now arriving more frequently — sometimes within the same year — there is less and less time to recover between shocks.

The insured advantage: smaller premiums, real protection

Now consider Elizabeth, a smallholder farmer who paid roughly the equivalent of CAD 3 for a picture-based insurance product ahead of the 2021 rainy season. When drought hit and her crop failed along with everyone else’s, she received a payout of about CAD 20 — modest in absolute terms, but enough to buy three bags of seed for the next planting season. Without that payout, she would not have been able to afford to replant at all. The insurance did not make her whole, but it kept her in farming.

This is the core economic argument for agricultural insurance: it converts an unpredictable, potentially catastrophic loss into a small, predictable cost. A premium paid in good times becomes the capital that restarts a farm after a bad season — seed, fertiliser, or working capital to get back into production before the next planting window closes.

There is a second, less obvious benefit. Research by CGIAR has found that weather index insurance encourages Kenyan smallholders to invest more in improved seeds, fertiliser and better farming techniques — even in normal years — because they know that investment is protected if the weather turns against them. In other words, insurance does not just cushion losses; it changes behaviour. Farmers who know they are covered are more willing to spend on the inputs that drive higher yields and better incomes, breaking the cycle of risk-averse, low-input, subsistence farming that traps so many smallholders.

According to Africa Re, an estimated two million smallholder farmers in Kenya now hold some form of agricultural insurance — a meaningful number, but still a small fraction of the country’s farming population. The Kenya Agricultural Insurance Programme, launched in 2016 as a public–private partnership, has trained more than 3.5 million farmers and now provides cover to around 1.6 million farmers across 38 counties and five value chains, including maize, sorghum, green grams, potatoes and onions. The direction of travel is clear: insurance is moving from a niche product to a mainstream part of how serious farming operations manage risk.

Why the calculation is shifting in favour of insurance

A few trends make this an especially good moment for farmers — smallholders and commercial operations alike — to take a closer look at agricultural insurance.

First, the risk itself is intensifying. With drought cycles shortening and flood events becoming more extreme and more frequent, the “wait and see” approach is becoming more expensive every year. The cost of doing nothing is no longer the cost of an occasional bad season; it is the cost of repeated, compounding shocks.

Second, the products have improved. Older indemnity-based models required loss assessors to visit individual farms, which was slow, costly and often impractical across Kenya’s dispersed smallholder landscape. Newer parametric and index-based products — triggered by rainfall data, soil moisture indices or satellite imagery rather than farm-by-farm inspection — are faster to pay out and cheaper to administer, which means premiums can be lower and claims can be settled in days rather than months.

Third, the regulatory environment is catching up. Kenya’s new Insurance (Index Insurance) Regulations are designed to formally regulate index-based products and require insurers to settle claims within 10 days — a significant improvement for farmers who need payouts quickly, ideally in time to fund the next planting cycle rather than months after the damage is done.

Fourth, and importantly, agricultural insurance is no longer just about crops. General agricultural insurance can extend to livestock, farm equipment, stores, fire, theft and business interruption — protecting the full operation, not just what is in the ground. For a farm business that has invested in irrigation infrastructure, storage, livestock or processing equipment, the exposure goes well beyond the crop itself, and the cover should reflect that.

What this means for your farm

If you farm in Kenya — or anywhere in the region where rainfall patterns have become this unpredictable — the question is no longer really “can I afford insurance?” It is “can I afford another season like 2022, or another season like 2024, without it?”

The farmers who came through recent shocks with their operations intact were not necessarily the ones with the biggest farms or the most capital. Often, they were the ones who had quietly transferred their weather risk to an insurer months earlier, for the cost of a small premium, freeing themselves to focus on what they do best: growing.

We work with partners who offer both crop risk insurance — covering loss or damage from drought, excessive rainfall, flooding, pests and disease — and general agricultural insurance, covering livestock, equipment, stores and broader farm assets. If you would like to understand what cover would look like for your specific operation, and what it would cost relative to the risk you are currently carrying unprotected, we would be glad to walk you through the options and connect you with the right insurance partner for your farm.

The weather is no longer predictable. Your protection against it can be.