Ensuring Insurance Marcel van Asseldonk travels the world researching harvest insurance policies for poor farmers. These are in the credit provider’s interests too. ‘Because of the growing demand for food crops, Africa is becoming more and more appealing to investors.’ Text Rik Nijland Photography Harmen de Jong
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magine an African farmer with a few hectares of land. The market is crying out for maize and seed is readily available. And yet the farmer does not seize this opportunity; putting all his eggs in one basket is too risky. If the harvest fails his family will have nothing to eat and, to make matters worse, will be in debt for the expensive seed. Specializing in a single crop usually leads to higher profits, but cultivating multiple crops with meagre but low-risk yields is a safer strategy. Unless, that is, the farmer is able to insure himself against a failed harvest. This is why, since the turn of the century, aid organizations – often in cooperation with socially responsible western insurance companies – have been working to set up harvest insurance policies in developing countries. It is a win-win situation explains Marcel van Asseldonk, in his office at the Leeuwenborch in Wageningen. It is not just the farmer who benefits; taking out insurance is in the credit provider’s interests too. ‘Farmers often don’t have enough financial capital to be able to specialize, or to buy fertilizer and high quality seed. But money lenders are often reluctant to offer them loans. What if there’s a major drought? Will the farmer still be able to pay back his loan? If the harvest is insured that risk is much lower for the money lender, especially if there is no other form of security. In Africa it is often unclear exactly who owns the land, what it’s worth, and whether it can be sold. In such cases an insurance policy can serve as security.’ A few wet years Van Asseldonk, who works for the agricultural economics institute LEI Wageningen UR, travels the world researching insurance policies for poor farmers. The foundation for his research was laid in the nineties when he worked for the Business Economics chair group at
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Wageningenworld
Marcel van Asseldonk