…as stakeholders review smart subsidy and agricultural insurance pilot
Moroke Sekoboto
For years, Lesotho’s smallholder farmers have played it safe to survive: holding back on high-yielding seeds, modern machinery and specialised fertilisers rather than risk losing everything to the next drought, flood or erratic rainy season. Now, the results of a landmark insurance pilot suggest there may be a better way – one that lets farmers invest with confidence instead of farming defensively.
Smallholder farmers make up the vast majority of Lesotho’s agricultural sector, yet many remain trapped in a cycle of low investment and vulnerability. Recurring droughts, erratic rainfall and flash floods have forced them to minimise financial exposure, and that defensive posture has kept productivity low, left rural communities exposed and put national food security at risk.
The recently concluded Agricultural Insurance Pilot Project in Mafeteng, Mohale’s Hoek and Quthing offers a potential way forward. Implemented under Subcomponent 2.2 of the Smallholder Agriculture Development Project II (SADP II), the pilot assessed how agricultural insurance can help farmers manage climate-related risks.
Rather than treating insurance merely as a safety net for after disasters strike, stakeholders are positioning it as a tool to drive investment and agricultural transformation. By reducing farmers’ exposure to climate-related losses, weather-indexed insurance could give smallholders the confidence to invest more boldly in their production.
Speaking at the Agricultural Insurance Pilot Project workshop at Victory Hall on Friday, Acting Deputy Principal Secretary in the Ministry of Agriculture, Food Security and Nutrition, Thabo Sekhonyana, said agricultural insurance was becoming increasingly important as the country continued to face climate-related and other risks affecting the sector.
He said the workshop brought together farmers, banks, insurance companies, brokers and other stakeholders to examine the pilot’s results and identify ways of strengthening the system. Reliable data, he said, was critical to effective planning and policy formulation, since every data point reflected the experiences of farmers, the risks they faced, and the stability of communities and the economy.
“Our ultimate goal is to establish a responsive and resilient agricultural insurance system that not only mitigates risks but also actively encourages investment, supports growth and contributes to the long-term prosperity of farmers,” Sekhonyana said, adding that climate risks could discourage agricultural investment, while reliable insurance could change how farmers managed their land and capital.
Speaking at the same workshop, WFP Head of Resilience and Smallholder Agriculture Market Support, Nancy Chawawa, said one of the pilot’s key findings was the severe impact of drought on farmers, particularly in Mohale’s Hoek and Mafeteng. She said information gathered during the assessment was verified by WFP officials, leading to the decision to pilot agricultural insurance in Mohale’s Hoek, Quthing and Mafeteng.
“We subsequently engaged relevant stakeholders to provide information on how the agricultural insurance project would be implemented. This gathering is an opportunity to review what transpired during the pilot and to understand the experiences and outcomes recorded,” Dr Chawawa said, calling on stakeholders to continue working together to explore ways of scaling up agricultural insurance so farmers could be better protected against recurring climatic shocks.
Ministry of Finance and Development Planning Director of Planning, Policy and Analysis, Mothobi Letooane, said they were reviewing the pilot’s results to determine whether insurance companies could be attracted into the agricultural sector to provide farmers with financial protection. He acknowledged the support of development partners, including the World Bank and WFP, saying the workshop provided an opportunity to examine the pilot report and draw lessons for the future.
“Agricultural insurance is not merely about numbers and data, but about protecting livelihoods, ensuring food security and fostering stability in a sector exposed to climate and market-related risks,” Letooane said. He added that insurance could give farmers a safety net enabling them to recover from unexpected losses, replant, reinvest in their households and continue contributing to national food production and economic growth – and that accurate, comprehensive data remained essential to understanding the impact of climate shocks on yields and to developing responsive, equitable support mechanisms.
LNIG Hollard Insure General Manager, Kefuoe Ramokhele, said agricultural insurance had the potential to transform Lesotho’s agricultural sector by giving farmers the tools to manage climate-related risks. He said the initiative aligned with its goal of developing transformative and impactful insurance solutions, and that the pilot sought to determine whether an agricultural insurance product could work in Lesotho.
“The feasibility study confirmed that climate change is already a reality, with farmers highly vulnerable to drought and erratic rainfall. Although awareness was initially limited, farmers showed an incredible willingness to consider the solution once its benefits were explained. This is how we build a future where farmers can invest with greater confidence,” Ramokhele said, adding that the study also found reliable agricultural and weather data available to support the design of appropriate insurance products.
African Risk Capacity (ARC) Senior Lead for Business Development in east and southern Africa, Norberto Mahalane, said the pilot was initiated after the country recognised that smallholder farmers, who make up the majority of farmers in Lesotho, were highly exposed to climate risks – exposure that has contributed to low investment in production capacity, equipment and agricultural inputs, resulting in low productivity and heightened vulnerability.
He said the insurance period ran for 18 months from October 2024 and focused on drought, with stakeholders agreeing to use the Water Requirements Satisfaction Index (WRSI) as the basis for the insurance following discussions held in September last year. The project’s governance structure involves the Ministry of Agriculture, the SADP Programme Management and Coordination Entity, and a Technical Working Group.
“Smallholder farmers constitute the majority of farmers in Lesotho, and their high exposure to climate risks directly causes low investment in production capacity, equipment and agricultural inputs. Protecting farmers against these risks via the weather-index model is key to reversing low productivity and ending systemic vulnerability,” Mahalane said.
SADP II’s Mphaki Makara said the insurance programme had recorded progress while acknowledging that challenges remained, and that the information shared during the workshop was valuable in understanding the programme’s performance and identifying areas requiring further attention.
“On behalf of SADP, our role is to ensure that the initiatives we undertake are not only well executed but also deliver tangible and positive impacts on the agricultural sector,” Makara said, describing the workshop as an important stage in translating data into actionable information and refining strategies for the coming season.
“The report reviewed today is more than just statistics; it is an indication of the resilience of our farmers and the importance of a dependable agricultural insurance framework,” he said, noting that the report also identified areas for improvement, including expanding outreach to underserved farming communities, streamlining agricultural insurance processes and adapting policies to address emerging climate-related risks.
“The insights and discussions from this workshop should therefore not end here. I encourage you to carry the momentum back to your respective organisations, champion the findings, advocate the necessary adjustments and collaborate in implementing the solutions we have identified,” he said, adding that the findings would inform future programming, with stakeholder feedback to be incorporated into planning and the development of targeted interventions.
“Our goal remains to build a more resilient, equitable and effective agricultural insurance system that truly supports the livelihoods of farmers while contributing to food security and the economic well-being of Lesotho,” Makara said.