Accra, June 30, GNA - The National Insurance Commission (NIC) in collaboration with the German International Cooperation (GIZ) on Thursday launched the first agricultural insurance product to protect farmers against financial risks resulting from negative impact of climate change.

The product dubbed: 932011 Drought Index Insurance" is under the Ghana Agricultural Insurance Programme (GAIP), which is being implemented to assist operators in the insurance industry to develop a sustainable agricultural insurance system as well as to introduce innovative crop insurance products.

The Drought Index Insurance Product is a comprehensive insurance cover for all the growing stages of maize, and being rolled out in the Northern, Upper East and Upper West Regions for maize during the 2011 season.

Launching the product in Accra, Mr Frederick QuayeNortey, Chairman of Board of Directors, NIC expressed the hope that both the insurance programme and product would improve access to agricultural and rural finance, smooth farmers' income and improve food security in both the medium and long term.

"Through GAIP we will be in a position to protect our farmers against risks associated with the negative effects of climate change=85reduce vulnerability and thus reduce poverty," he said.

Mr QuayeNortey cautioned that the extreme weather events could lead to loss of crops, earnings and livelihoods of families that relied mainly on agriculture if the situation was not addressed.

He said empirical evidence showed that the Mean Daily Temperature in Ghana was expected to increase by three degrees Celsius and rainfall to decline between nine and 27 per cent by 2100.

"This would result in higher temperatures, higher frequencies and intensity of droughts, floods as well as other weather related perils," he added.

Dr Fred Brandi, Country Director of GIZ said GAIP had been touted and recommended as the best for its structure, content, systematic approach and local capacity in implementing at the Weather Index Insurance for Africa event recently held in Harare, Zimbabwe in April 2011.

He said GIZ chose to collaborate with NIC to invest in the agricultural sector due to the fact that it was the backbone of many economies.

Dr Brandi said maize was chosen due to the fact that it was the most important staple and the premium crop grown in all the regions.

Dr Brandi described the product as a risk management instrument that protected the farmers and their financiers from the negative effects of extreme weather and to manage droughts.

Mr Benjamin K. Acolatse, President of Ghana Insurers Association, underscored the crucial role meteorological services played in the weather indexed-linked insurance stressing that government needed to modernise and automate weather stations throughout the country.

He conceded that the Drought-Index Insurance was new to the Ghanaian industry and urged stakeholders to diligently study the policy.

"We all must ensure that we understand what risks are being covered and what factors will trigger a claim. I therefore urge all our direct and indirect clients to take steps to study and understand the insurance policies being issued," he added.

Mrs Nyamikeh Kyiamah, Insurance Commissioner described the agricultural insurance programme and product as a relief to hardworking farmers in the event of crop failure due to extreme weather events such as droughts, excess rainfall and floods.