Agricultural Insurance in Uganda

Agriculture is the backbone of Uganda’s economy, employing over 70% of the population. Yet the sector is highly vulnerable to risks such as droughts, floods, pests, and price volatility. These challenges can wipe out entire seasons of labor and income in a matter of days.

Agricultural insurance has emerged as a vital tool to protect Ugandan farmers — both large and small-scale — from financial ruin due to natural and market-related risks. This 2025 guide explores the key components of agricultural insurance in Uganda, the types of coverage available, major providers, costs, success stories, and how the sector is evolving.

1. What is Agricultural Insurance?

Agricultural insurance is a risk management solution designed to protect farmers and agribusinesses from losses caused by weather-related events, pests, diseases, and other production-related risks. In Uganda, this insurance covers:

Crop insurance (for drought, flood, pests, hail)
Livestock insurance (for disease, theft, accidental death)
Farm asset and equipment insurance (e.g., tractors, irrigation)
Index-based insurance (based on weather data or satellite tracking)
Agribusiness or cooperative-level group cover

Agricultural insurance reduces dependence on government bailouts, loans, or savings when disaster strikes.

2. Why Agricultural Insurance Matters in Uganda

Agriculture in Uganda faces recurring threats:

Unpredictable rainfall patterns
Extended dry spells and flooding
Pests and diseases (e.g., Fall Armyworm, Banana Wilt)
Market price shocks and poor storage
Post-harvest losses
Limited access to finance for smallholder farmers

With insurance, farmers are empowered to:

Recover quickly from losses
Maintain production levels
Access credit and inputs with insurer backing
Invest in higher-yield crops or new technologies
Improve food security and household resilience

3. Types of Agricultural Insurance in Uganda

There are several agricultural insurance products available, tailored to different types of farmers and agribusinesses.

3.1 Crop Insurance

Protects farmers from the loss of expected yield due to weather or pests.

Covers:

Drought and excessive rainfall
Flooding
Pest or disease outbreak
Fire damage

Applies to key crops such as:

Maize
Beans
Rice
Coffee
Bananas
Cotton
Sugarcane
Fruits (e.g., pineapple, mango, passion fruit)

3.2 Livestock Insurance

Insures animals against death or illness due to:

Accidents or injury
Epidemics
Predators
Poisoning or theft (depending on policy)

Livestock covered:

Cattle (dairy and beef)
Goats and sheep
Pigs
Poultry (on a group or farm basis)

Insurers may require veterinary inspections before issuing cover.

3.3 Index-Based Weather Insurance (IBWI)

This innovative product is linked to a measurable index (e.g., rainfall levels, temperature, or satellite data) rather than individual farm visits.

How it works:

Weather data from a specific area is monitored (e.g., rainfall below 100mm)
If a trigger threshold is reached, all insured farmers in that area receive a payout — even without filing a claim

Benefits:

Faster payouts
No need for loss assessment visits
Lower administration costs

Best suited for smallholder farmers with limited documentation.

3.4 Group and Cooperative Insurance

Farmer groups, SACCOs, or cooperatives can purchase coverage for all their members at discounted rates. This approach:

Reduces premiums through pooled risk
Increases bargaining power
Simplifies claims processes
Encourages accountability and accurate reporting

Group cover can include bundled services like access to loans, inputs, training, and storage facilities.

4. Major Agricultural Insurers in Uganda

Several insurers, in collaboration with the government and development partners, offer agricultural cover:

UAP Old Mutual
Jubilee Allianz
CIC Africa Uganda
APA Insurance
GoldStar Insurance
ICEA Lion
Sanlam General
Uganda Insurers Association (UIA – coordinating pooled insurance)

Partnerships exist with:

Government of Uganda (premium subsidies via Uganda Agricultural Insurance Scheme)
Uganda National Meteorological Authority (for index insurance data)
Financial institutions and microfinance institutions (e.g., Centenary Bank, BRAC)

5. Uganda Agricultural Insurance Scheme (UAIS)

Launched in 2016, the UAIS is a public-private partnership between the Ministry of Finance and Uganda Insurers Association. It provides:

Premium subsidies of up to 50% for farmers
Index and conventional insurance options
Coverage for all farming regions
Targeted support for youth, women, and smallholders

As of 2025, over 400,000 farmers have benefitted from this program. The government has pledged continued funding and digital expansion.

6. How Much Does Agricultural Insurance Cost?

Premiums are typically calculated as a percentage of the sum insured. Average costs:

Product Type	Premium (% of insured value)	Estimated Cost (UGX/acre or animal)
Crop Insurance	4% – 7%	UGX 50,000 – 150,000 per acre
Livestock Insurance	3% – 5%	UGX 25,000 – 100,000 per animal
Index Insurance	2% – 4%	UGX 30,000 – 70,000 per season

Farmers with larger acreage or cooperatives enjoy lower per-unit premiums due to economies of scale. Government subsidies further reduce costs.

7. Claims Process for Agricultural Insurance

Depending on the type of insurance:

For traditional crop/livestock insurance:
- Farmer reports damage within 48 hours
- Insurer sends an assessor to evaluate losses
- If approved, compensation is paid by mobile money or bank transfer
For index-based insurance:
- No reporting is required
- Payouts are triggered automatically based on weather station or satellite data
- Claims are settled within 2–4 weeks

Insurers often work with agricultural extension officers, veterinary officers, and co-op leaders to verify claims and distribute payments.

8. Benefits of Agricultural Insurance

✅ Enables farmers to take risks and adopt modern practices
✅ Facilitates access to seasonal loans or farm credit
✅ Reduces poverty and food insecurity
✅ Encourages climate resilience and disaster preparedness
✅ Helps agribusinesses meet production targets
✅ Stabilizes rural income levels
✅ Enhances financial inclusion for women and youth

9. Challenges Facing Agricultural Insurance in Uganda

Despite its benefits, uptake is still low due to:

Limited awareness among smallholder farmers
Low trust in insurance due to delayed claims in the past
Poor access to weather stations and real-time data
Limited agent networks in rural areas
Complex policy language
Cultural beliefs and resistance to paying premiums

Continued education, digital solutions, and government support are helping to overcome these barriers.

10. The Future of Agri-Insurance in Uganda

As climate change increases risk and volatility, agricultural insurance will be a cornerstone of food system resilience. Expected trends:

More use of mobile platforms for policy enrollment and payouts
Integration with agri-fintech and input suppliers
Custom insurance bundles for coffee, dairy, and export crops
Increased participation by banks and MFIs
Blockchain and satellite use for transparent data tracking
Gender-targeted products for women farmers

The government is also working to scale up the National Agricultural Insurance Scheme with new digital partners in 2025–2030.

How to Get Started as a Farmer

Visit your SACCO, bank, or cooperative to inquire about group cover
Contact a licensed insurance agent for quotes and guidance
Ask about government subsidies and pilot projects in your area
Check for bundled services from agro-input dealers or mobile networks
Read the policy carefully and ask questions before signing

Conclusion

Agricultural insurance in Uganda is no longer just a pilot program — it’s a key part of sustainable farming in a changing climate. By protecting crops, livestock, and farm equipment, it empowers farmers to take calculated risks, invest in productivity, and secure their livelihoods.

If you’re a farmer, agribusiness, or policy advocate, now is the time to explore insurance solutions that match the realities of modern agriculture in Uganda.