Crop insurance

Here is an interesting article on a simple crop insurance scheme for Kenyan farmers. If the weather fails them, the policy pays out a percentage of their input costs. This is important, because often insurance is the missing link in getting farmers access to credit. If the bank considers a farmer a default risk, they won't offer him a loan. But if he's insured, the bank feels more comfortable dealing with him.

I have a few questions and doubts about the particular insurance setup described in the article. For instance, what does the input supplier get in return for paying part of the farmer's initial down-payment? And why does the insurance only repay 80% or so of input costs in case of crop failure? I assume these things have to do with the increased transaction costs of dealing with small-scale, poor farmers, but I'd like to know more about it.

Here's another short bit on small-scale farmer insurance.