LAGOS – The need for farmers and agribusiness practitioners to embrace insurance and have a good understanding about risk management is the main thrust of a one-day forum organised by the Lagos Agro-Processing, Productivity Enhancement and Livelihood Support (APPEALS), a World Bank-assisted project.
The project, implemented through the Federal Ministry of Agriculture and Rural Development in six participating states of Cross River, Enugu, Kaduna, Kano, Kogi and Lagos, is a six-year project expected to run between 2017 and 2023.
Lagos APPEALS is aimed at enhancing agricultural productivity of small and medium scale farmers based in Lagos and improving value addition in poultry, aquaculture and rice.
The Agricultural Insurance and Risk Management Forum, which was organised at the Johnson Agiri Complex, Oko-Oba, Agege, Lagos, had farmers, representatives of the Nigerian Agricultural Insurance Corporation (NAIC), Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL), and other private insurance companies, in attendance.
Oluranti Sagoe-Oviebo, Lagos State project Coordinator for APPEALS, while educating and encouraging the farmers on the need to take insurance very seriously, stressed the need for the farmers to do insurance as that is key for their businesses.
She said that unfortunately, it has been discovered that a lot of farmers shy away from it and do not bother to insure their farms or businesses.
She affirmed that the forum was initiated by the Lagos APPEALS Project for farmers to enhance their productivity, which is one of the major objectives of the project, which will ensure that the farmers sustain what they are doing to improve their livelihoods.
Also speaking on the effect of climate change, Sagoe-Oviebo said it is affecting the farmers in a very bad way, adding that the time is now for all to know about climate change.
She stated further that if the farmers insured their farms, it would help them to mitigate and minimise their losses during the outbreak of any epidemic like avian flu and others on their farms.
“We are aware that there are issues. Even as a human being, you should insure your life. For your businesses, insurance is key, but unfortunately, we have discovered that overtime, a lot of farmers shy away from it.
“Climate change is something that is affecting our farmers in a very bad way, but if the farms are insured, it helps to mitigate or minimise their losses,” she said.
Nelson Idemudia, a representative of the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL), said NIRSAL was established to address issues contributing to the lackluster and low level of finance and investment for agricultural and agribusiness.
Also, it was established to fix broken agricultural value chains, complex credit assessment process and procedures, high transaction cost, among others.
Idemudia said before NIRSAL was set up, insurance was indemnity based but it has changed to Area Yield Index Insurance.
He said that NIRSAL had been able to increase the number of agric insurance firms to nine to provide more insurance for farmers and has redefined, measured, priced and shared agribusiness related credit risk.
He added that NIRSAL does not give loans or funds directly to farmers but facilitates finance from financial institutions.
According to Idemudia, “NIRSAL does not give loans or funds directly to farmers but facilitates finance from financial institutions, and it has been able to increase the number of agric insurance firms to nine to provide more insurance for farmers. We redefine, measure, price and share agribusiness related credit risk,” he added.
Bolaji Folayan, a representative of Nigeria Agricultural Insurance Corporation (NAIC), stated that NAIC was set up by the Federal Government to provide insurance cover to farmers in times of loss.
He said the Federal Government granted the premium by 50 per cent while farmers pay 50 per cent per cycle.
While advising farmers to promptly report any loss to the insurance company, he said it is very important to do so in order to facilitate prompt payment of insurance claims.
Folayan said that businesses and entrepreneurs were exposed to various risks, which include those of production, transportation, financial, storage, market and legal risks.
He said that agriculture had moved away from traditional farming methods to agribusiness, adding that the risk that farmers faced most were production related.
He noted that agric lending banks would only give loans to farmers who had secured their farms through insurance, stating that before now, when farmers suffered any loss on their farms; they were only compensated by National Emergency Management Agency (NEMA) and other emergency agencies.
According to him, “When farmers suffer any loss on their farms, before now, there is no compensation; they are compensated by NEMA and other emergency agencies and now, the government has deemed it fit to create a corporation that will be saddled with responsibility of compensating the farmers with a pool of fund being contributed by the government and also the farmers in what we call premium”.
Dr. Bola Azeez, a representative of the First Adequate Benefits Insurance Brokers, said that the essence of insurance was for prompt and adequate claim payment in times of emergency and losses.
She said insurance was a necessity that all farmers, irrespective of the size, must embrace.
While urging them to seek the services of brokers for quick facilitation of insurance policies, Azeez advised them to protect their investments through insurance, adding that it was better to have something they needed than for them to need something that they do not have.
Some of the farmers, who spoke to DAILY INDEPENDENT at the forum, commended the Lagos APPEALS for organising the programme.
They said that the programme has really opened their eyes to the need for them to embrace insurance and also preach the same message to some other farmers who were not present at the programme.
Oluwatoyin Oloyede, a fish farmer, commended Lagos APPEALS for providing the platform for farmers to interface with different insurance firms to have better knowledge about how to secure their business.
She said that the forum was very educating and had encouraged her to adopt an insurance policy plan immediately.
Also, Juliana Ibitoye, chairman of Erikorodo Poultry Farm Estate, Ikorodu, commended the organiser for initiating the meeting between them and the insurance companies in the state.
The meeting, according to her, was of great importance to small holder farmers because it had exposed them to the opportunities in insurance during distress.
“It has been emphasised now that insurance is very important in agriculture in case of disaster, bad weather, flooding, diseases, fire, windstorm and accident.
“Any incident that can affect your product, insurance will come to your aid and mitigate the loss. I am very happy to be part of this forum,” Ibitoye said.
Meanwhile in time past, farmers lamented the insensitivity of the Nigerian insurance companies to the plight of the farmers.
Some of those who have lost their farm produce to fire disaster, flooding, theft, drought, among others, lamented that insurance companies, which are supposed to provide cover for farmers at such a time, do not help issues, as the insurance system put in place does not favour them.
The forum has, therefore, changed this orientation, which a lot of them are having about insurance companies in the country.