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Only two million farmers have insurance cover – NAIC

By BusinessNews Staff on April 1, 2015

About two million Nigerian farmers have adequately insured their agricultural operations and outputs.

The Managing Director, Nigerian Agricultural Insurance Corporation, Mr. Bode Opadokun, disclosed this to our correspondent in an exclusive interview.

He also said the corporation was introducing measures to increase the number of farmers with insurance cover to five million by the end of the current financial period.

“We plan to increase the number of insured farmers from the current two million to as high as five million at the end of the 2015 financial period,” he said.

Some losses are peculiar to farmers and hinder their production, prompting the Federal Government to establish the Nigerian Agriculture Insurance Scheme in 1987.

The scheme was later incorporated in 1988 and it became the Nigerian Agricultural Insurance Corporation by the enabling Act 37 of 1993, with the main aim of providing insurance cover for farmers.

Some of the objectives of NAIC include making investment in agriculture more attractive through efficient risk management and prompt claims payment, and enhancing the adoption of improved farming practices to boost total agricultural production.

With insurance, it is expected that farmers will be able to enjoy credit from lending institutions and eliminate the need for emergency assistance usually provided by the government during the occurrence of disasters.

NAIC is the only insurance company that is licensed to underwrite agricultural insurance. It also enjoys the support of the Federal Government, which has been subsidising some of the policies in order to encourage farmers to get cover.

Opadokun told our correspondent that for crop production, farmers were more prone to drought and flood, among other losses.

He explained that NAIC was a means by which the government planned to support the farmers to increase food production and manage the risk elements of the agricultural sector.

Opadokun said the corporation conceptualised, designed and implemented a new distribution model for agricultural insurance for small-scale crop farmers participating in the Growth Enhancement Support Scheme of the Federal Ministry of Agriculture and Rural Development.

This insurance package, he explained, was known as the Plant with Peace Programme.

According to him, the insurance distribution model, which has been officially adopted as the risk management component, deploys crop insurance cover to registered farmers through an electronic system and mobile phones.

“The operating model for this new business, which is electronically driven by a software designed for the GES programme, ensures that crop farmers entitled to subsidised inputs under the GES programme get a crop insurance cover worth at least N20,000 on their farms for a premium charge of N500,” Opadokun said.

During the last dry season farming, where about 500,000 farmers participated from 12 states, he said 51,300 farmers purchased the cover.

As part of its commitment to the research and development of new insurance products that would meet the needs of Nigerian farmers and mitigate the effect of climatic change, he said the corporation had opened up series of discussions with overseas technical partners to establish the underwriting of weather index insurance in the country.

“The intention is to leverage on their experience in the development of this product, build enduring relationships that will boost our human capital and ensure that our farmers are happy,” Opadokun said.

[Punch]

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