In most of Lesotho’s lowlands, maize fields should have been flourishing by February, with flowering stalks and developing cobs promising a harvest to sustain households through the coming months.
Instead, this year, many fields were waterlogged, with crops rotting in saturated soil and stagnant pools of water offering a stark reminder of how quickly extreme weather can destroy months of hard work.
For smallholder farmers who depend on agriculture to feed their families, generate income and sustain their livelihoods, the damage was devastating. What should have been a productive season became a painful lesson in the growing unpredictability of the weather — and the financial vulnerability of those whose livelihoods depend on it.
For ‘Malebaka Molupe, a 48-year-old widowed mother of four from Ha Molipa in Leribe district, the season’s losses wiped out an investment she had spent months preparing.
Before the winter cropping season, Molupe sold wool and mohair and saved more than M6,500 to invest in farming. She divided the money among maize for household consumption, sugar beans for both commercial sale consumption and fodder, locally known as lesekhe, for her cattle.
She says training at her local agricultural resource centre had introduced her to intercropping and crop diversification, giving her renewed hope that planting different crops could reduce the risk of losing everything in a single season.
She believed that diversifying her fields would provide a measure of protection against the vagaries of the weather. However, the heavy rains that struck during the winter cropping season proved far more destructive than she had anticipated.
These were not the gentle, life-giving rains that farmers traditionally pray for during planting seasons. Instead, persistent downpours left agricultural land across vulnerable parts of the lowlands waterlogged, overwhelming the soil’s drainage capacity and damaging crops at critical stages of development.
When the water eventually receded, the scale of the destruction became clear. Molupe’s maize stalks had rotted at the roots, her sugar beans had suffered severe fungal damage that rendered them unmarketable, and the valuable fodder had been washed away.
“This was not the first time it rained severely, but this time I lost my entire anticipated harvest,” Molupe says, recalling the experience with quiet disbelief.
She had expected to harvest more than 50-kilogram bags of maize and 30 bags of beans. Instead, she harvested virtually nothing.
“I thought that because I planted three different crops, I would be safe, but the rain took all of them at once,” she says in a telephone interview.
“I used all my money on seeds and fertiliser, and now I have to sell a cow or a few sheep in order to buy fertilisers for this summer cropping,” she adds.
Molupe’s experience illustrates a wider challenge confronting agricultural producers across Lesotho, particularly smallholder farmers with limited savings and few financial safety nets.
While larger commercial operations may have reserves or access to credit to absorb a poor season, smallholders can lose their entire agricultural investment to a single extreme weather event.
A changing climate, an uncertain harvest
Lesotho’s latest agricultural figures underline the seriousness of the challenge. According to the Food and Agriculture Organization-supported Famine Early Warning Systems Network (FEWS NET), estimates from the Lesotho Bureau of Statistics indicate that the 2026 maize harvest was approximately 30 per cent below the previous year’s level and 55 per cent below the five-year average. Heavy rainfall in April and May caused waterlogging, restricted access to fields and delayed harvesting activities.
The outlook for the next cropping season is equally concerning. FEWS NET’s August 2026 assessment warned that El Niño conditions could delay the onset of the October 2026–April 2027 rainy season, with below-average rainfall threatening planting, crop establishment and livestock conditions.
Meanwhile, the Integrated Food Security Phase Classification (IPC) projects that approximately 311,000 people in rural Lesotho could face Crisis-level or worse acute food insecurity between October 2026 and March 2027. Climate shocks, high food prices and livestock diseases are among the factors contributing to the deteriorating outlook.
These figures highlight a difficult reality: whether farmers face excessive rainfall or prolonged dry spells, the consequences can extend far beyond the fields. Crop failure reduces household food supplies, undermines incomes, weakens farmers’ ability to purchase inputs and increases the likelihood that they will sell livestock or other productive assets to survive.
Against this backdrop, agricultural insurance raises an urgent question for the government, development agencies, insurers and financial institutions: can financial protection help Basotho farmers withstand severe climate shocks without sacrificing the assets they need to rebuild their livelihoods?
From surviving the weather to managing the risk
For many Basotho, insurance is traditionally associated with vehicles, property or funeral expenses rather than crops and livestock. Extending insurance to agriculture therefore requires more than introducing a new financial product. It requires building awareness, establishing trust and demonstrating that insurance can provide meaningful support when farming goes wrong.
Recognising this need, the Ministry of Agriculture, Food Security and Nutrition, through the Smallholder Agriculture Development Project II (SADP II), partnered with the World Food Programme (WFP) and other stakeholders to support an agricultural insurance pilot during the 2025/2026 cropping season.
LNIG Hollard was involved in implementing the initiative, while the African Risk Capacity (ARC) provided technical support for product development, actuarial pricing, satellite-based monitoring, the calculation of insurance outcomes and reinsurance arrangements.
The pilot focused on Mafeteng, Mohale’s Hoek and Quthing, targeting farmers vulnerable to climate-related production risks. It covered maize and beans, with more than US$1.2 million in insured value reported for the initiative.
The programme sought to establish whether weather-index insurance could work under Lesotho’s agro-climatic conditions, protect farmers against severe drought, strengthen institutional capacity and generate evidence to inform the development of future agricultural insurance products. It also aimed to explore how insurance could complement agricultural development and smart subsidy programmes.
Unlike conventional crop insurance, which generally relies on assessing actual damage or losses, parametric insurance pays out when a predefined weather or other measurable index crosses an agreed threshold. In the pilot model, satellite observations were used to monitor crop water availability throughout the growing season and compare the results against contractual parameters.
The pilot provided an opportunity to test the model, strengthen understanding among stakeholders and assess how weather-index insurance could contribute to agricultural risk management in Lesotho.
For farmers such as Molupe, the central question is straightforward: could an insurance payout help replace part of the money lost to a failed harvest, allowing them to purchase seeds and fertiliser for the next season without selling livestock?
A new opportunity for the 2026/2027 season
Building on the pilot, LNIG Hollard has indicated plans to offer its parametric agricultural insurance product for the 2026/2027 cropping season.
‘Matinkane Potlaki, Business Development Team Lead at LNIG Hollard, said enrolment is scheduled to run from November 1, 2026 to April 30, 2027, with the product intended to reach smallholder farmers across all ten districts.
Potlaki encouraged farmers to consider insurance as a means of protecting their agricultural investments against climate-related risks, including drought and excessive rainfall.
She also highlighted its potential to strengthen agricultural lending by giving farmers and financial institutions an additional layer of protection against weather-related production shocks.
“Parametric means the payment is triggered by a parameter — in this case, rainfall measured by satellite and weather stations,” Potlaki explained.
The approach offers a potential alternative to lengthy loss-assessment processes, but its effectiveness will depend on whether the chosen parameters accurately reflect the risks faced by farmers in different locations.
Potlaki also emphasised the importance of collaboration among government, insurance companies, financial institutions, development partners and farmers in building a sustainable agricultural insurance market.
Agricultural insurance cannot prevent floods, droughts or crop diseases. Nor can it guarantee that every farmer will recover every loss. However, when appropriately designed and accessible, it can provide a financial buffer that helps farmers resume production instead of falling into a cycle of borrowing, asset sales and declining agricultural output.
For the initiative to reach its intended beneficiaries, farmers will need clear information about premiums, coverage, exclusions, payout thresholds and the circumstances under which compensation will be made. They will also need practical guidance on registration, including the provision of identification, accurate field-size details and information about the crops they intend to insure.
Affordability will be another decisive factor. Smallholder farmers already face the high costs of seeds, fertiliser, labour and transport. If insurance premiums are beyond their means, those most exposed to climate shocks may be least able to afford protection. Carefully designed subsidies, transparent pricing and links with agricultural credit and input-support programmes could help widen access.
Beyond individual farms: protecting national resilience
Lesotho has also experienced the use of insurance at the national level. In August 2025, the country received a drought-insurance payout of approximately US$2.77 million (approximately M48.6 million) from the African Risk Capacity under its sovereign drought insurance policy for the 2024/2025 agricultural season. The funds were intended to support households affected by drought, with reported assistance of M1,500 per eligible household.
Sovereign insurance and individual farm insurance serve different purposes. Sovereign cover helps governments mobilise resources for disaster response, while farm-level insurance can help individual producers protect their investments and resume agricultural activities after qualifying weather events. Used together, these mechanisms can form part of a broader approach to climate-risk financing.
Lessons from regional experience
Lesotho is not alone in exploring agricultural insurance as a response to climate risk. Across Africa, governments, insurers and development organisations have developed different approaches to protecting farmers and pastoralists against drought, excessive rainfall and other production shocks.
Ghana established an agricultural insurance pool in 2011, while Senegal developed a specialist agricultural insurance pool in 2009. Rwanda and Tanzania have also expanded agricultural insurance initiatives, including public-private arrangements in 2018/2019 and 2023, respectively.
The experiences of these countries demonstrate that agricultural insurance can take several forms, from individual crop policies to satellite-based weather-index products and livestock insurance.
For Lesotho, these regional experiences offer useful lessons as the country considers how to move from a pilot initiative towards a more accessible and sustainable agricultural insurance system.
As the country prepares for another uncertain cropping season, agricultural insurance deserves urgent attention from policymakers, insurers, development partners and farmers. The priority should be to develop products that are affordable, transparent, responsive to local weather risks and supported by reliable data and farmer education.
The rain will always remain beyond any farmer’s control. But with the right combination of insurance, climate-smart farming and public support, one bad season need not become a lasting catastrophe.
