TEDSalon Berlin 2014
Rose Goslinga: Crop insurance, an idea worth seeding
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Across sub-Saharan Africa, small farmers are the bedrock of national and regional economies—unless the weather proves unpredictable and their crops fail. The solution is insurance, at a vast, continental scale, and at a very low, affordable cost. Rose Goslinga and the Syngenta Foundation for Sustainable Agriculture pioneered an unconventional way to give farmers whose crops fail early a second chance at a growing season.
Rose Goslinga - Microinsurer
Rose Goslinga isn’t your typical insurance salesperson. Through the Syngenta Foundation, her team developed insurance solutions to assist small-scale farmers in Africa, to safeguard their crops in case of droughts. Full bio
Rose Goslinga isn’t your typical insurance salesperson. Through the Syngenta Foundation, her team developed insurance solutions to assist small-scale farmers in Africa, to safeguard their crops in case of droughts. Full bio
Double-click the English transcript below to play the video.
00:12
In Kenya, 1984 is known
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as the year of the cup,
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or the goro goro.
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The goro goro is a cup used to measure
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two kilograms of maize flower on the market,
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and the maize flower is used to make ugali,
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a polenta-like cake that is eaten
together with vegetables.
together with vegetables.
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Both the maize and the vegetables are grown
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on most Kenyan farms,
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which means that most families can feed themselves
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from their own farm.
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One goro goro can feed three meals
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for an average family,
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and in 1984, the whole harvest
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could fit in one goro goro.
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It was and still is one of the worst droughts
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in living memory.
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Now today, I insure farmers against droughts
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like those in the year of the cup,
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or to be more specific, I insure the rains.
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I come from a family of missionaries
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who built hospitals in Indonesia,
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and my father built a psychiatric hospital
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in Tanzania.
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This is me, age five, in front of that hospital.
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I don't think they thought I'd grow up
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to sell insurance. (Laughter)
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So let me tell you how that happened.
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In 2008, I was working
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for the Ministry of Agriculture of Rwanda,
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and my boss had just been promoted
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to become the minister.
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She launched an ambitious plan
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to start a green revolution in her country,
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and before we knew it, we were importing
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tons of fertilizer and seed
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and telling farmers how to apply that fertilizer
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and plant.
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A couple of weeks later,
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the International Monetary Fund visited us,
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and asked my minister,
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"Minister, it's great that you want to help farmers
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reach food security, but what if it doesn't rain?"
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My minister answered proudly
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and somewhat defiantly,
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"I am going to pray for rain."
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That ended the discussion.
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On the way back to the ministry in the car,
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she turned around to me and said,
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"Rose, you've always been interested in finance.
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Go find us some insurance."
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It's been six years since,
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and last year I was fortunate enough
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to be part of a team that insured
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over 185,000 farmers in Kenya and Rwanda
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against drought.
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They owned an average of half an acre
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and paid on average two Euros in premium.
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It's microinsurance.
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Now, traditional insurance doesn't work
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with two to three Euros of premium,
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because traditional insurance relies on farm visits.
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A farmer here in Germany would be visited
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for the start of the season, halfway through,
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and at the end, and again if there was a loss,
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to estimate the damages.
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For a small-scale farmer in the middle of Africa,
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the maths of doing those visits
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simply don't add up.
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So instead, we rely on technology and data.
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03:12
This satellite measures
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whether there were clouds or not,
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because think about it:
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If there are clouds, then you might have some rain,
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but if there are no clouds,
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then it's actually impossible for it to rain.
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These images show the onset of the rains
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this season in Kenya.
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You see that around March 6,
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the clouds move in and then disappear,
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and then around the March 11,
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the clouds really move in.
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That, and those clouds,
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were the onset of the rains this year.
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This satellite covers the whole of Africa
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and goes back as far as 1984,
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and that's important, because if you know
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how many times a place has had a drought
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in the last 30 years,
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you can make a pretty good estimate
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what the chances are of drought in the future,
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and that means that you can put a price tag
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on the risk of drought.
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The data alone isn't enough.
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We devise agronomic algorithms
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which tell us how much rainfall
a crop needs and when.
a crop needs and when.
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For example, for maize at planting,
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you need to have two days of rain
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for farmers to plant,
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and then it needs to rain once every two weeks
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for the crop to properly germinate.
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After that, you need rain every three weeks
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for the crop to form its leaves,
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whereas at flowering, you
need it to rain more frequently,
need it to rain more frequently,
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about once every 10 days
for the crop to form its cob.
for the crop to form its cob.
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At the end of the season,
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you actually don't want it to rain,
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because rains then can damage the crop.
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Devising such a cover is difficult,
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but it turned out the real challenge
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was selling insurance.
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We set ourselves a modest target
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of 500 farmers insured after our first season.
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After a couple of months' intense marketing,
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we had signed up the grand total
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of 185 farmers.
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I was disappointed and confounded.
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Everybody kept telling me that farmers
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wanted insurance,
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but our prime customers simply weren't buying.
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They were waiting to see what would happen,
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didn't trust insurance companies,
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or thought, "I've managed for so many years.
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Why would I buy insurance now?"
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Now many of you know microcredit,
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the method of providing small loans to poor people
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pioneered by Muhammad Yunus,
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who won the Nobel Peace Prize
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for his work with the Grameen Bank.
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Turns out, selling microcredit
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isn't the same as selling insurance.
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For credit, a farmer needs
to earn the trust of a bank,
to earn the trust of a bank,
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and if it succeeds, the bank will advance him money.
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That's an attractive proposition.
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For insurance, the farmer needs to trust
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the insurance company, and needs
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to advance the insurance company money.
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It's a very different value proposition.
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And so the uptick of insurance has been slow,
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with so far only 4.4 percent of Africans
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taking up insurance in 2012,
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and half of that number is in one country,
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South Africa.
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We tried for some years
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selling insurance directly to farmers,
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with very high marketing cost
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and very limited success.
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Then we realized that there were many organizations
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working with farmers:
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seed companies, microfinance institutions,
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mobile phone companies,
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government agencies.
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They were all providing loans to farmers,
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and often, just before they'd finalize the loan,
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the farmer would say,
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"But what if it doesn't rain?
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How do you expect me to repay my loan?"
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Many of these organizations
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were taking on the risk themselves,
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simply hoping that that year,
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the worst wouldn't happen.
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Most of the organizations, however,
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were limiting their growth in agriculture.
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They couldn't take on this kind of risk.
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These organizations became our customers,
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and when combining credit and insurance,
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interesting things can happen.
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Let me tell you one more story.
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At the start of February 2012 in western Kenya,
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the rains started, and they started early,
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and when rains start early, farmers are encouraged,
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because it usually means that
the season is going to be good.
the season is going to be good.
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So they took out loans and planted.
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For the next three weeks,
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there wasn't a single drop of rain,
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and the crops that had germinated so well
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shriveled and died.
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We'd insured the loans of a microfinance institution
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that had provided those loans
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to about 6,000 farmers in that area,
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and we called them up and said,
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"Look, we know about the drought.
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We've got you.
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We'll give you 200,000 Euros
at the end of the season."
at the end of the season."
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They said, "Wow, that's great,
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but that'll be late.
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Could you give us the money now?
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Then these farmers can still replant
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and can get a harvest this season."
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So we convinced our insurance partners,
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and later that April, these farmers replanted.
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We took the idea of replanting to a seed company
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and convinced them to price the cost of insurance
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into every bag of seed,
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and in every bag, we packed a card
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that had a number on it,
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and when the farmers would open the card,
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they'd text in that number,
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and that number would actually help us
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to locate the farmer
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and allocate them to a satellite pixel.
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A satellite would then measure the rainfall
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for the next three weeks,
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and if it didn't rain,
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we'd replace their seed.
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One of the first —
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(Applause) — Hold on, I'm not there!
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One of the first beneficiaries
of this replanting guarantee
of this replanting guarantee
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was Bosco Mwinyi.
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We visited his farm later that August,
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and I wish I could show you the smile on his face
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when he showed us his harvest,
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because it warmed my heart
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and it made me realize why selling insurance
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can be a good thing.
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But you know, he insisted
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that we get his whole harvest in the picture,
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so we had to zoom out a lot.
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Insurance secured his harvest that season,
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and I believe that today,
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we have all the tools to enable African farmers
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to take control of their own destiny.
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No more years of the cup.
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Instead, I am looking forward to, at least somehow,
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the year of the insurance,
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or the year of the great harvest.
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Thank you.
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(Applause)
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ABOUT THE SPEAKER
Rose Goslinga - MicroinsurerRose Goslinga isn’t your typical insurance salesperson. Through the Syngenta Foundation, her team developed insurance solutions to assist small-scale farmers in Africa, to safeguard their crops in case of droughts.
Why you should listen
Rose Goslinga describes her work as “insuring the rain.” Raised in Tanzania, Goslinga was working for the Rwandan Ministry of Agriculture in 2008 when the minister had a bold idea: could they offer insurance to small farmers to protect them in case rain didn’t come when needed? Goslinga ran with the idea. Under the Syngenta Foundation’s Kilimo Salama program, which is Swahili for “safe farming,” the thought became a reality. Last year, through its local insurance partners, it insured 185,000 farmers in Kenya and Rwanda against drought, and was recently spun into a company called ACRE.
Think of microinsurance the way you think of microloans. The average farmer insured in this way has a half-acre farm and pays just two Euros as an annual premium. Rather than using farm visits to determine damages, cloud data determines when payouts are due to farmers. Building this program has taken the Syngenta Foundation six years and has greatly tested their aptitude for creative problem-solving, from figuring out how to get farmers to trust insurance companies to creating technological solutions to help map which farmers are using the product.
Rose Goslinga | Speaker | TED.com