Extreme weather, rising input costs and production uncertainty are forcing farmers to rethink how they manage risk on their operations. Despite the growing pressure, agricultural insurance is still too often viewed as an optional expense rather than a core farming tool.
That was a key message during a panel discussion hosted by Food For Mzansi and Land Bank at Nampo last week, where insurers, brokers and farmers unpacked the realities of agricultural risk management.
Herbert Mokoena, provincial manager at Land Bank Insurance Company (LBIC), said insurance is a vital tool for managing risks farmers cannot control.
“Insurance should not be seen as a grudge purchase,” he said. “Farmers should view it as a risk management tool for risks beyond their control.”
Mokoena pointed to recent years of drought, floods and excessive rainfall as reminders of farming’s vulnerability.
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He referenced regional droughts between 2016 and 2018, the devastating KwaZulu-Natal floods in 2022, and heavy rains during the current season that disrupted planting plans.
“Perils such as hail, fire and wind damage are outside a farmer’s control. Insurance helps cushion that risk,” he said.
He encouraged farmers to budget for insurance as part of their production input costs rather than treating it as an optional expense.
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Brokers simplify a complex process
The discussion also tackled the perception that insurance is complicated.
Insurance broker representative Silas Seokoma said brokers help farmers navigate products, policies and claims.
“We begin with a client-needs analysis, identify suitable products and assist throughout the policy lifecycle, including claims,” he explained.
He said brokers also play a role in challenging the belief that insurers do not pay claims. “Farmers often hear that insurance companies are a scam or that claims are never paid. Our role is to guide them through the process and show how insurance works in practice.”
Independent broker representative Thabo Mnumzana agreed that brokers can make insurance easier by translating technical policy wording into practical terms.
However, he warned that brokers can also contribute to confusion by overcomplicating products or failing to understand farmers’ realities.
“If you are not on the farm, you are not going to get a farmer’s attention. You need boots on the ground, and you need to understand their lifestyle,” Mnumzana said.
Lessons from the field
Farmer Phillip Mukhithi, who has farmed since 2007, shared how inaccurate policy details affected a claim on his operation.
“You cannot farm without insurance,” he said. “Disaster does not announce itself.”
He urged farmers not to accept insurance quotations based only on phone conversations. “Make sure the broker comes to your farm. They need to see exactly what you are insuring.”
Mukhithi explained how broad land descriptions, rather than detailed field mapping, reduced compensation for weather damage. He noted that insurers increasingly use GPS coordinates and field-level mapping, making accurate information essential.
In one instance, only part of the farm was damaged. Still, because the land had been insured under broad, generalised descriptions rather than accurately mapped sections, the resulting payout was lower than expected.
Despite the experience, Mukhithi remained convinced of the value of insurance, noting that without cover, he was unsure how he would have recovered after losses that forced him to replant nearly 60 hectares.
Plan before planting
Seokoma identified poor timing as one of the most common mistakes farmers make, noting that many producers only approach brokers after planting.
This can create unnecessary risk, as waiting periods may apply before cover becomes active. He encouraged farmers to consider planning policies before the season begins to ensure cover is in place.
“A planning policy is not a final policy. It allows farmers to prepare cover early and adjust it later according to actual planted hectares,” Seokoma explained.
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