Growing confidence

Targeted insurance is being developed to help protect Madagascar’s farmers against the effects of natural disasters and other weather-related risks.

Under the agricultural insurance programme announced by the International Finance Corporation (IFC) and the government of Madagascar, Malagasy insurance companies will be assisted in creating insurance products specifically for farmers that will protect them from the effects of cyclones, droughts, floods and pest invasions. It is hoped that by having insurance, farmers will have greater access to financial services, strengthen their climate resilience and increase productivity.

Agriculture comprises a quarter of Madagascar’s GDP and 64% of total employment, with smallholder farmers accounting for about 70% of the farming population. Yet, more than half struggle to access financial services, negatively affecting their productivity and incomes.

According to the IFC, farmers who are insured have a lower credit risk, thus easing their access to other financial services such as loans, and building creditor confidence.

Fanomezantsoa Lucien Ranarivelo, the country’s Minister of Agriculture, Livestock and Fisheries, says the programme will enable farmers to achieve food self-sufficiency. ‘This will encourage banks and financial institutions to support farmers through access to credit to overcome the risks associated with climate change.’