The Federal Government says it is planning to increase the number of farmers under insurance coverage from 500,000 to 3.8 million through the recently launched index-based agricultural insurance scheme.
Managing Director of the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL), Aliyu Abdulhameed, said the organisation was partnering the Royal Exchange Assurance, the Nigerian Meteorological Agency (NIMET) and Cellulant for the development of a technology-driven Hybrid Index Insurance product that will include the area yield index, weather index and price index insurance.
Abdulhammed said that the four agencies would also develop insurance schemes to help end the persistent farmer-herder clashes, noting that the agency’s operations were anchored on five pillars.
“These are risk sharing facility pillar ($300 million), insurance pillar ($30 million), technical assistance pillar ($60 million), rating pillar ($10 million) and incentives pillar ($100 million),” he noted,” Abdulhameed who was speaking at a forum on insurance in Abuja said.
While stating that his organisation was not mandated to provide insurance services, Abdulhameed said that the organisation was concerned about developing effective agricultural insurance products for agricultural value chain players as well as providing a linkage between insurance products and agricultural loans.
“In our quest to build a viable and sustainable agro economy where smallholder farm yields are guaranteed, and projected incomes protected, NIRSAL, throughout 2017, worked with a consortium of underwriters (NAIC, Leadway, IGI, AXA Mansard) to develop the Area Yield Index Insurance (AYII) product,” he said.
The NIRSAL boss said with support from the National Insurance Commission (NAICOM), the insurance roadmap that covered risks such as disease, weather, natural disasters and several other external factors was launched, adding that over 25,000 smallholder farmers had subscribed to it since it was launched six months ago.
Commissioner for Insurance, Mohammed Kari, noted that the partnership between NAICOM and NIRSAL had been very successful, adding that product approval had been granted to five companies participating in the pilot scheme, with the number expected to grow to 20 in the future.