A mobile crop insurance cover product has won the 2012 Financial Times and IFC Award for Technology in Sustainable Finance.

The insurance cover, known as Kilimo Salama, uses technology to monitor weather patterns and compensate farmers in the event of losses.

Kilimo Salama relies on low-cost mobile phone payments and data systems. It also uses automated, solar-powered weather stations to provide affordable insurance against drought and excess rain.

The insurance cover product - supported by the Syngenta Foundation for Sustainable Agriculture, UAP Insurance and telecoms operator Safaricom - has already safeguarded thousands of smallholder farmers from losses due to floods and drought.

The project has helped change the negative perception about insurance among Kenyans by using a host of low-cost technologies to win farmers' trust.

The programme uses data from automated solar-powered weather stations positioned across the country to monitor weather patterns.

In the event that there is too much or no rainfall, which could affect the farmer’s yield, compensation is paid out to the affected farmers via mobile money transfer service, M-Pesa.

Kilimo Salama, loosely translated to mean "safe farming" in Swahili, covers a farmer's seeds, fertiliser and other inputs for crops such as maize, wheat, beans and sorghum.

When the programme was rolled out in 2009, farmers were sceptical about it, but it has since grown in popularity, now covering 46000 farmers from the initial 200.

Jennifer Mbiro, one of the farmers who took part in the 2009 pilot said, "I am happy that I have received a payout, but since I did not really trust insurance I only insured my fertiliser and not the seed. Therefore my payout is small this time.”

“This season I've insured my seeds, fertilisers, as well as some chemicals that I'm trying for the first time," she added.

Mike Mack, chief executive of Syngenta AG, recently wrote an article published by the Wall Street Journal that the programme growth 'has been explosive' and it could extend to the rest of Africa.

"Only 200 wary farmers participated during Kenya's 2009 drought, the worst in decades. When these farmers received payouts for bad weather, 11,000 additional farmers signed up right away to insure their seeds and other inputs,” he said.

“There is no reason why this programme cannot be adapted throughout much of Africa," he explained.

Farmers pay a 5% premium on top of the price of seeds, fertiliser and other farm inputs to purchase the Kilimo Salama insurance cover from agro-dealers who have been registered and trained across the country.

The agro-dealers each have a camera phone to scan a special bar code on the product of either seeds fertilisers or herbicides at the time of purchase.

This registers the insurance policy with UAP Insurance through Safaricom's mobile data network.

The farmer is then sent a text message confirming they have purchased the insurance policy.