The Federal Government recently announced its introduction of a new insurance policy for farmers to encourage more investment in agriculture in the country. The agricultural insurance, worth $500 million, is expected to mitigate farmers against risks like drought, herders’ attack and price shock, and similar shocks experienced by farmers in the country.
The insurance cover initiative is a collaborative effort 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.
Managing Director of NIRSAL, Mr. Aliyu A. Abdulhameed, who spoke at a training programme to sensitise operators of insurance firms on the new index-based agricultural 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 farmers insurance policy. Under it farmers in the country will be provided with cover to de-risk them against possible natural and man-made unforeseen incidences that would ordinarily deter many from venturing into investment in agriculture. Against the bad experiences of farmers in the country as a result of loss resulting from bad weather, natural disasters and other unforeseen circumstances experienced in agriculture, the new agricultural insurance is a step in the right direction and therefore a welcomed development.
Apart from the difficult and tediousness of agriculture and the high financial outlay involved in it, a major reason why young people and even the rich stay away from agriculture, particularly large scale agriculture, is the lack of insurance to de-risk them against possible losses sustained as a result of bad weather, pest invasion, fire and burglary, attacks by herders and their cattle as well as insurgents.