NCBA CLUSA Mozambique has commenced implementation of its one-year SEEDS+ project, a partnership funded by the U.S. Agency for International Development (USAID)/Mozambique through the Feed the Future Partnering for Innovation program implemented by Fintrac Inc.
SEEDS+ is a follow-on from NCBA CLUSA Mozambique’s three-year Smallholder Effective Extension Driven Success (SEEDS) project that, between 2015 and 2017, supported two local seed companies Phoenix Seeds and Oruwera Seed Company to develop rural seed distribution networks that enabled over 280 rural last-mile seed retailers to sell 203 tons of certified grain and legume seed to over 20,000 smallholder farmers in northern and central Mozambique.
With just under $500,000 in project funding and leveraging an additional $500,000 in partner contributions, this new phase will support the local seed company Phoenix Seeds to take certified seed sales to a new level by partnering with Hollard Insurance to become the first Mozambican seed company to automatically include weather index insurance in all of its products, at no extra price to the consumer.
Phoenix will make insured seed available through its agrodealer network in Manica and Zambézia provinces in central and northern Mozambique, respectively. Any farmer who buys Phoenix seed and experiences crop failure due to flood or drought will be able to reclaim replacement seed at no additional cost, either for that same growing season or the next campaign. The ability to obtain and re-sow replacement seed will not only increase smallholders’ resiliency to extreme climate events (like cyclones Idai and Kenneth, which devastated much of central and norther Mozambique in 2019), but will also stimulate the smallholder market by encouraging farmers to test certified seed for the first time.
Any farmer who buys Phoenix seed and experiences crop failure due to flood or drought will be able to reclaim replacement seed at no additional cost.
SEEDS+ was designed to promote development of effective and sustainable markets for index-based weather insurance. The project will test and pilot tools and mechanisms that will make it technically and financially possible to extend insurance to smallholder clients, a target market usually excluded from traditional insurance products. Claims will be assessed using remote sensor satellite data from Hollard’s claims assessor e-Leaf, complemented by real-time field scouting using state-of-the-art drone technology.
Most innovative of all will be the use of SMS as a digital tool for farmers to register their policies and receive real-time product, production and claims advice, made possible by a partnership with Frontline SMS. To stimulate awareness of and demand for weather index insurance, the partnership will design and implement a social marketing campaign using community radio, television, social media, community mobilization and roadshows, in addition to company merchandizing and events to raise the company’s profile with a range of stakeholders at the national level.
Weather index-based seed insurance can be a highly effective risk sharing mechanism for both smallholders and larger companies. As Phoenix’s clients come to realize this, they will more than likely start to demand the same service from other seed companies as standard. This increased demand, in turn, should increase economies of scale for insurers, drive down premium costs and make insurance more accessible for all.
It may also mean that Phoenix faces competition from other seed brands keen to follow in its footsteps—something Phoenix is not afraid of, confident that its long-term partnership with NCBA CLUSA Mozambique will help to maintain its position as market leader and pioneer, retaining smallholder customer loyalty and its image as the number one supplier of high quality, locally adapted and locally available seed in Mozambique.