Mar 11th 2010 | From The Economist print edition

A new microinsurance plan involving cellular phones and solar powered weather stations will combat the unwillingness of farmers with small plots of land to invest in better seed and fertilizer in Kenya. Kilimo Salama, which in Kiswahili means “safe farming”, uses a combination of mobile phones and 30 automated solar-powered weather stations to provide crop insurance. It has been set up by UAP Insurance of Kenya, Safaricom, Kenya’s biggest mobile-network operator, and the Syngenta Foundation for Sustainable Agriculture, part of a large Swiss agribusiness group. Farmers pay an extra 5% to insure a bag of seed, fertiliser or other things like herbicide against crop failure. MEA Fertilisers and Syngenta East Africa, two agribusinesses hoping to benefit from higher sales of their products, match the farmers’ investment to meet the full 10% cost of the insurance premium.

The clever bit, however, is the administration as local agents simply register a policy using a camera-phone to scan a bar code on each bag sold. With no field surveys, no paperwork and no middlemen, transaction costs are minimal, while the impact of the scheme has already begun to benefit the farmer population.

Read the Economist Article