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Crop Insurance in Tanzania: A Complicated Story

More efforts must be made to ensure that farmers and their produces are insured.

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The sixth-phase government, under the leadership of President Samia Suluhu Hassan, has taken impressive steps towards investing in the agricultural sector as a means to improve both the individual and national economy.

The steps have given stakeholders hope that the potential for the sector in Tanzania will continue to grow.

Amidst this optimism, however, it is essential to exercise some caution, particularly concerning protecting investments directed to the sector.

While there is potential to enhance production in agriculture, the risk of losses is also rising due to the effects of climate change, which include floods and droughts, challenges like pests, and market price fluctuation.

Compared to other sectors, crop insurance has been a snubbed option for most farmers, which leaves room for uncertainty, especially in the production node.

Thirty-three registered insurance companies are operating in Tanzania as of 2021.

However, the insurance penetration rate in Tanzania is low, with less than two per cent, (around six million adults) of the population currently covered by insurance.

READ MORE: Why Is Tanzania Benefiting Less From Its Dairy Sector?

According to TIRA, only six insurance companies of the total number of registered insurances in Tanzania provided agriculture insurance in Tanzania in 2021, which also performed very poorly compared to other businesses.

According to the Tanzania Market Insurance Report (2019 -2021), the total gross premium written was only 0.02 per cent of the total gross premium written in the general insurance business in 2021.

The trend for two previous consecutive years that is 2020 and 2019, was marked by 0.02 per cent and 0.1 per cent of the total premium business written, showing poor performance of the sector in relation to the insurance industry.

This, among other reasons, could also account for why agriculture is poorly performing since the sector is moving in a naked, unprotected pathway, although it has the potential to contribute highly to the national GDP.

It is safe to say that the agricultural sector and the insurance industry barely sit at the same table.

READ MORE: Agribusiness in Tanzania: A Solution to Youth Unemployment

The reasons for this range are income-related constraints that hinder farmers in insuring their produces and knowledge-based constraints common among the rural population.

There is also a complication that arises in designing the best framework that will dictate product development suitable for agricultural produces.

While TIRA emphasises the development of insurance products by insurance service providers that will target low-income earners, insurance acquiring could be a hard pill to swallow for low-income earners.

The relationship between the agricultural sector and the insurance industry lacks an intermediary that would ensure the elimination of the sipping trend of insurance service providers towards the agricultural sector.

TIRA’s efforts to increase farmers’ awareness of the importance of agricultural insurance as a protection against risks are welcome.

However, the government can also subsidize insurance companies or pay half of the premium costs for farmers, especially those now registered and identified through the farmers’ registration process.

This is an even better option since the government is itself a principal debtor.

Growth needs to be inclusive, resilient, and sustainable. Our agricultural sector might need to work closely with the insurance industry in crop insurance to achieve this, considering the number of people engaged in the sector.

It will also be a good idea if the forthcoming projects targeting agriculture, or even budgetary allocations in the ministry, address the issue of crop insurance in an attempt to change the status quo.

Gibson Mulokozi is an agronomist and trained project manager with over four years of experience in social research, monitoring & evaluation and marketing. He is available at These are the writer’s own opinions and do not necessarily reflect the viewpoints of The Chanzo Initiative. Do you want to publish in this space? Contact our editors at for further inquiries.

Digital Freedom and Innovation Day
The Chanzo is hosting Digital Freedom and Innovation Day on Saturday April 20, 2024 at Makumbusho ya Taifa.

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One Response

  1. Personally, I agree with the content of the writer.
    There is a serious and immediate Action to be taken by the Government.The Issue of Government subsidizing the farmers can come out with a better results and ending up encouraging farmers to engage themselves in agriculture and increase the number of farmers which will further raise up the Countries Economy.

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