More than two years after devastating floods destroyed critical farm infrastructure and disrupted production, Maphlix Trust Ghana Limited is still struggling to recover, with its Managing Director , Dr Felix Mawuli Kamassah warning that the high cost of agricultural insurance leaves businesses exposed to similar disasters.
The company operates Maphlix Farms, located at Tadzevu in the Volta Region, where the May 25, 2024 floods cost it close to US$500,000 in damaged investments and lost business opportunities.
The damage included irrigation systems, greenhouses, tractors and other equipment, alongside fertilisers and supplies that were ruined when the company’s warehouse was flooded.
The immediate destruction has since become a longer-term financial burden, as Maphlix continues to restore its operations while dealing with the cost of replacing damaged assets and rebuilding its productive capacity.
“We are struggling putting things in place,” Dr Kamassah said, describing the difficulty of recovering from the disaster.
For him, the experience also exposes a weakness in the support available to agricultural businesses: while insurance could help companies recover from climate-related shocks, the premiums quoted for agricultural coverage are often too high to make commercial sense.
The result, he said, is that businesses expected to invest in food production, create jobs and expand their operations can find themselves bearing much of the cost when extreme weather destroys their investments.
Flood damage compounded existing pressures
The disaster struck at a difficult time for Maphlix, following the disruptions associated with COVID-19, exchange-rate pressures and difficulties in international supply chains and freight.
Dr Kamassah said the floods delayed planned activities and compounded the company’s existing challenges, leaving it with substantial losses to absorb.
The consequences extended beyond equipment and infrastructure. Maphlix had about 150 casual workers whose employment was affected as the company sought to rebuild its operations.
The disruption illustrates how a climate-related disaster can spread through an agricultural business, affecting production, employment and the company’s ability to meet its growth targets.
“If it’s not that incident, I think the company will grow and be more efficient to follow its obligations and the targets it wants to achieve,” he said.
The company’s experience raises a difficult question for Ghana’s agricultural sector: how can businesses be encouraged to invest in modern farming and create jobs when a single disaster can wipe out productive assets and leave them struggling for years to recover?
For Dr Kamassah, affordable insurance must form part of the answer.
Insurance remains beyond the reach of many agribusinesses
Dr Kamassah said Maphlix had engaged insurance industry stakeholders, including discussions with SIC Insurance, but argued that the cost and design of agricultural insurance products remained major obstacles.
He said insurers appeared willing to serve the sector but needed a better understanding of the risks, production cycles and financial realities of farming.
“The quotation alone they will give is even higher than the production cost,” he said, describing the difficulty of obtaining coverage even for a single acre of farmland.
Such pricing, he argued, discourages agricultural businesses from insuring their investments, leaving them vulnerable when floods, droughts and other extreme weather events occur.
For Maphlix, the problem is particularly relevant after the 2024 disaster. Insurance that could have helped cushion the financial blow would have provided a more structured route to recovery, rather than leaving the company to rebuild while absorbing the cost of damaged infrastructure and lost production.
Dr Kamassah is therefore calling on the National Insurance Commission to work with insurers and agricultural businesses to develop policies that reflect the realities of farming and make coverage more affordable.
He wants agricultural assets, including farms, irrigation systems, machinery, greenhouses, storage facilities and produce moving through the supply chain, to receive greater attention in insurance product development.
“The farm is a property,” he said, arguing that agricultural investments should be considered alongside other assets routinely covered by insurance.
He also believes premiums must be set at levels that encourage uptake, rather than make insurance more expensive than the investment being protected.
A wider challenge for agricultural investment
The problem extends beyond Maphlix. Dr Kamassah said agriculture had historically been regarded as a high-risk sector by financial institutions, making access to financing difficult for some businesses.
Without affordable insurance, the risks are compounded. Businesses may struggle to secure financing, protect existing investments or obtain the resources needed to rebuild after a disaster.
That creates a wider challenge for efforts to attract young people into agriculture and position the sector as a source of jobs, investment and food security.
Commercial farming requires spending on land preparation, irrigation, equipment, inputs, storage and distribution. When those investments are destroyed, the financial consequences can persist well beyond the event itself.
Dr Kamassah believes insurers must better understand how agricultural businesses operate, including the time required to produce crops and generate revenue, to develop policies that provide meaningful protection.
He is urging continued engagement between agricultural associations, the Insurance Commission and insurance companies to close the gap between the coverage businesses need and the products currently available to them.
For Maphlix Trust Ghana Limited, the May 2024 floods remain a costly setback more than two years later. The company’s continuing struggle underscores the importance of ensuring that agribusinesses do not have to face the full financial consequences of climate-related disasters alone.
As Dr Kamassah sees it, encouraging investment in agriculture requires more than urging businesses to expand. It also requires an insurance system that allows them to protect what they have built and recover when disaster strikes.
