By Zainab Iwayemi
- Local and small scale farmers claim ignorance of the scheme in Nigeria
Agriculture has, over the years, continued to be at the centre of human existence. And because humans must feed, farmers’ relevance becomes increasingly refreshed in the world. However, with increasing population and digital transformation, there is need to pay attention to subject matters such as agri-insurance, a system that can help farmers prepare for the worse, especially as the world now battles with alarming man-made and natural disasters with a tendency to cause destruction to farmland and farm produce.
Agricultural insurance is fast becoming a subject of relevance not only to farmers but to everyone who, by virtue of being on the planet is a stakeholder. The subject matter focuses on stabilizing producers’ income by minimizing the economic effects of primary production losses caused by severe, but uncontrollable hazards, such as drought, flood, wind, frost, excessive rain, heat, snow, uncontrolled disease, insect infestations and wildlife.
Experts who are conversant with the subject matter have consented to the relevance of agricultural insurance as a way of helping to improve production within the sector.
Ufedo Monday Shaibu, a research expert in agricultural economics, opined that the adoption of agricultural insurance will help create a conscious shift from the normal into a more enterprising business.
“Insurance and specifically, agricultural insurance will help improve agricultural production. It will consciously shift farming away from normal activity to a business enterprise. This is because the agricultural sector is exposed to adverse natural events such as drought, flood, wind storm, pests and diseases,” Shaibu explained to Business A.M.
He said there was an additional risk from the increasing incidence of conflicts – farmer-herder conflicts, banditry, insurgencies, communal clashes, cattle rustling, among others, adding that, “These shocks and vulnerabilities illustrate the critical need for farmers to build resilience in response to the risks factors vis-à-vis, participate in agricultural insurance. Agricultural insurance can stabilize farm income and investments in the agricultural sector,” Shaibu said.
Business A.M. found that many Nigerian farmers, principally those operating on a small scale basis, are either unaware or have a misconception of the scheme.
Adeyi Kaosara, the CEO of ABK farms located in Kwara State, in a telephone interview, pointed out that she has no knowledge of the existence of agri-insurance. “I know of property insurance but I am not aware of agricultural insurance specifically,” she said, expressing her lack of knowledge of the different type of insurance as exist covering agricultural and farming activities.
In a similar account, Sayuti Adam who is into small scale poultry, explained that he has always seen insurance as a thing for the affluent.
“I have actually heard of insurance and I think everything can be insured in any sector, but at times we are of the mentality that it is the rich people that need insurance policies. Personally, I think insurance is a very expensive thing that people like me wouldn’t be capable of doing,” Adam told this newspaper.
In the meantime, some farmers, claimed that although they are aware of agricultural insurance, they are constrained to opt-in for the scheme due to unavailable funding and low returns on investment.
Iyare Harrison, CEO Harry Portal farms in Benin who specializes in oil palm plantation noted that the nature and the scope of his business do not require insurance.
“My business is not insured at the moment because basically, the kind of farming I am into does not require it. When we (the business) were dealing in animal production, we use to have insurance for them, but now, we are into plant basically and the plant I am doing is farm-related, even if fire gets into the farm it will not be destroyed. That’s why I am less bothered about insurance. We just feel that there is no need since the risk is minimal. What is the essence of insuring if the risk factor is not there? It’s not what fire can destroy or what can be stolen, neither can flood destroy it. We can begin to insure in the future when we begin to create an investment forum. Everything boils down to money because insurance is not for free,” Iyare said.
Isaac Daniel, a poultry farmer in Benin also said he is aware of agric-insurance but he has not subscribed owing to limited funds. “I know of Agri-insurance but I have not taken the policy owing to limited fund and I know the scheme is very good.”
The limited knowledge among this group of farmers suggests that agri-insurance needs to be reinforced in every corner of the country as not many farmers know what it involves. This calls for government and regulatory bodies to come into play here.
In lieu of this, experts have recommended a regional awareness programme for farmers in all sub-regional division.
Ufedo Monday Shaibu said, “I will recommend the use of existing structures. We have Nigerian Agricultural Insurance Corporation (NAIC) in all state’s headquarters, including the FCT. We also have the Agricultural Development Project (ADP) spread across the 36 states and FCT. ADP has extension agents spread across various blocks and cells. Extension blocks and cells are usually at the local government area level and communities level respectively. If NAIC lacks the required manpower, the agency can empower the staff of ADP (extension agents) to carry out such awareness campaign. The extension agents will then further train contact farmers at the community level which will trickle down to farming households”.