The Ministry of Food and Agriculture (MoFA) is currently working with stakeholders to secure insurance for farmers against the vagaries of the weather and other risks. The move is part of measures to boost the country's food security. The Director of Planning at the MoFA, Mr Ram Ebo Bhavnani, stated this in Accra yesterday at the opening of a week's workshop on Insurance in the agricultural sector for insurance companies in Anglophone West Africa. The training course aims to build the capacity of insurance institutions by providing them with the knowledge and skills required to design, price and implement agricultural index-based weather insurance programmes. It is being organised by the World Bank, the European Union (EU) and the National Insurance Commission (NIC). In Ghana, insurance penetration is below two per cent. Although agriculture makes up almost 40 per cent of this country's Gross Domestic Product (GDP) and employs 60 per cent of the entire population, there is currently no insurance support for the sector. If the move takes off, it will be the first time farmers in the sub-region will be insured. When farmers are insured, they will be made to pay premiums and when their crops fail as a result of bad weather, they will be adequately compensated by the insurance companies. Mr Bhavnani said MoFA had established a $1.5 billion medium-term investment fund and needed to remove all risks in the sector to ensure that the money was put to good use. In a welcoming address, the National Insurance Commissioner, Ms Nyamike Kyiamah, expressed gratitude to the World Bank's Agricultural Risk Management Team (ARMT) for the training course and said it would complement efforts already underway to build the capacity and expertise needed for the development of agricultural insurance in Ghana. "A vibrant agricultural insurance sub-sector will definitely help develop the agricultural sector, create jobs, contribute significantly to export earnings and reduce poverty," she said. A Senior Economist of the ARMT, Mr Carlos Enrique Arce, said weather risk affected farmer profitability and remained one of the major constraints limiting farmers from accessing credit necessary to expand production and improve productivity. Index-based weather insurance for agriculture, he added, was emerging as a risk management instrument that could potentially enable agricultural stakeholders to transfer risk to parties better able to manage such risk. He said under that type of insurance, farmers would be compensated based on changes in an index, rather than an assessment of actual amount of damages, adding that it acted as a proxy for yield. Source: Daily Graphic