FG plans $500 million insurance lifeline for farmers, raises coverage to 3.8m beneficiaries

The Federal Government has designed a new insurance policy for farmers worth $500 million to encourage more investment in agriculture in the country through mitigating the risks like drought, herders’ attack, price shock and the like.

The new insurance cover initiative is a collaborative product of the National Insurance Commission of Nigeria (NAICOM); the Central Bank of Nigeria (CBN) funded Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) and the operators of the insurance industry within and outside the country.

Under the newly-introduced index based agricultural insurance, farmers in the country are being provided with cover to de-risk possible natural and man-made unforeseen incidences that would ordinarily deter many from venturing into investment in agriculture.

Managing Director of NIRSAL, Mr. Aliyu A. Abdulhameed, who spoke yesterday at a training programme to sensitise operators of insurance firms on the new index agriculture insurance, said the Federal Government had decided to increase insurance coverage for agricultural primary producers from 500,000 to 3.8 million in the coming years and that the training was part of efforts to nurture local and international partnerships to train insurance experts in Nigeria that would midwife the recently-introduced farmers insurance policy.

Besides, the Commissioner for Insurance, Alhaji Mohammed Kari, who spoke at the event, said the collaboration between NAICOM and NIRSAL had so far been very successful and that product approval had been granted to five companies participating in the pilot scheme. This number, he said, will grow to 20 in the coming years.

Also, speaking at the training event, Minister of Agriculture, Chief Audu Ogbeh, lamented that “the agricultural sector and agro entrepreneurship is plagued with a lot of risks and uncertainty which makes most financial institutions reluctant to give financial support to our farmers and as a result, few farmers in developing countries now have insurance cover.”

Ogbeh, represented by Mr. Abdulazziz Olumuyiwa, noted that “a billion people have been taken out of poverty over the last 15 years but in the same period, natural disasters have pushed over 400 million people back to poverty.”

He said: “Once claims are paid out to cover their damages, they can repurchase the inputs they need and reinvest in crops. Insurance leads to increase adaptive capacity enabling farmers to boost savings while encouraging investment thus increasing productivity and wealth in the country and creating a virtual cycle of resilience.”