Kilimo Salama – Index-based Agriculture Insurance

Anysia_Insured Farmer_On her farm in the southern province of Rwanda

Kilimo Salama is a climate smart crop-index insurance scheme helping smallholding farms face the risks posed by adverse weather. Insurance can be purchased by individual farmers at their local stockiest, when buying inputs. Payouts are based on comparing local rainfall measurements to an agronomic model of specific crop’s rainfall needs. At the end of the growing season, payouts are sent automatically through the East African mobile money transfer service, M-Pesa.

A report from the International Food Policy Research Institute estimates that by 2050 grain crop yields in sub-Saharan Africa will shrink substantially, due to the drought and adverse weather variability caused by climate change, by 2050. Average rice, wheat and maize yields will decline by up to 14%, 22% and 5%, respectively.

Previously weather insurance on inputs was not available to small farmers, since the premium to insure a 200-acre farm was the same as a one acre farm, as insurance adjustors had to visit every farm.

Kilimo Salama is climate smart crop-index insurance scheme that is distributed through agro-vets (retailers), further reducing costs as it eliminates the needs to support an independent distribution channel. Policies are offered on inputs: certified seeds, fertilizers and crop protection products, when purchased. For each input a farmer insures, they pay a small premium – generally 5% of the recommended retail price, which is matched by the input suppliers. Retailers use a camera-phone to scan a bar code on each input; with a text message confirming the policy sent instantly to the farmer’s cell phone. Local weather stations set up by SFSA in partnership with the Kenyan Meteorological Service measure rainfall, which is compared to an agronomic model specifying crops rainfall needs. Ifa station reports insufficient rain farmers in the affected area receive a payout at the end of the season on their mobile phones, via the M-Pesa system. Payout depends on the severity of the insured event.


Weather-based index insurance reduces transaction costs substantially, as measures from a weather station are used to determine drought conditions and insurance payouts. As a result farmers with as little as an acre of land can enroll. With premiums less than 5% of the cost of inputs, index insurance also enables farmers to test and build trust in insurance. Then in the future they may be willing to purchase more expensive crop insurance that the covers the full value of their production.

Weather-based index insurance on inputs facilitates a faster recovery for farmers and the local economy following a drought, as farmers can use the insurance payment to replant and meet other household needs.


  • In three years, Kilimo Salama has become the largest agricultural insurance program in Africa.
  • First to use mobile phone technology to speed access and payouts to rural farmers.
  • To date Kilimo Salama has insured 73,000 farmers in Kenya and Rwanda.


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