As the raining gradually gets to its peak with attendant disasters from flooding, stakeholders in agric and insurance sectors are expected to step up efforts to minimise losses that are peculiar to the season. Sunday Ojeme reports
Last year, some agric sector stakeholders in the country lamented the grave losses by farmers to attacks on various crops and livestock attacks.
Although they put the estimated loss from livestocks alone at over N20 billion annually, efforts to stem the tide appear not to be enough as agric investors are continually being exposed to series of natural disasters, especially flooding that keeps ravaging their investment.
According to the stakeholders, absence of insurance cover for smallholder farmers is part of the reasons livestock agriculture was not growing in the country.
Although they acknowledged the importance of insurance in their business, they, however, lamented the absence of specific products tailored along their investment.
According to the Executive Director, Zynosism Nigeria Ltd, Dr. Kolade Adebayo, the insurance sector should create products that capture small farmers.
“The absence of insurance products for small farmers is costing the agricultural sector over N20 billion annually. We need insurance products that will aggregate small farmers cooperatively and provide cover for them. As such, insurance companies need to deal with poultry associations, rice farmers association and so on so that agricultural produce can be enhanced.
“Risk is an integral element of the farming industry, but the challenge we are having is that we don’t have the insurance partnership to cover most of our risks. The association of livestock farmers usually organize annual agric forums where we come together to discuss issues. For years we have always invited stakeholders from other sectors to rob minds together on ways of moving agric business forward. For over 10 years that we have been having this forum, while we have had many representatives from other sectors, we only see one person from the whole of the insurance industry. This is not good for the insurance sector.”
Similarly, the Chairman, SME Trade Group, Lagos Chamber of Commerce and Industry (LCCI) Mr. Biodun Oladapo, echoed Adebayo when he said that livestock business was still stunted in Nigeria because over the years there has not been insurance support to give it a boost.
Oladapo said: “We have seen little growth in livestock business in the country because we have not had adequate insurance support. Any farmer that has any insurance cover today got it because they wanted bank loans. Unfortunately, no bank in Nigeria will give any farmer loan without insurance cover.
“For the farmers that have insurance, when cows enter a rice farm and eat up the rice, the insurance companies will tell you that ‘cow eating rice’ was not covered. At the end of the day, no claim will be paid and the farmer is abandoned to his fate. Such incidents have contributed in impoverishing many farmers and the experience is causing apathy between us and insurers. So there is need for the insurance sector to introduce products that will cover all our risks.”
Touched by the outcry, the President of the Nigerian Insurers Association (NIA), Mr. Tope Smart, promised that the insurance industry would partner the agricultural sector going forward as part of measures to survive and thrive, saying that even the insurance sector was under threat of survival, and as such, should re-strategize and innovate to continue to exist.
This is not the first time that farmers would come out openly to bemoan losses to disasters, especially following their failure to take advantage of benefits provided by government through insurance.
Recall that last year, President Muhammadu Buhari had personally promised compensation to farmers whose investments were lost to flooding. It has, thus, become an annual ritual for the few farmers now in the business, as bandits and cattle herders have scared others out, to agonise over losses to flooding and other disasters including strange insects.
As a matter of caution and the need to be prepared, the management of Nigerian Agricultural Insurance Corporation (NAIC) has again drawn their attention to the ‘Red Flood Alert’ issued by the Nigerian Hydrological Services Agency (NHISA) with respect to some states of the federation.
NAIC’s alarm to the farmers is to enable them prepare early by arranging insurance cover for their investments.
According to the Managing Director/CEO of the corporation, Mrs. Folashade Joseph, the reminder underscores the need for farmers to keep abreast of the impact of the heavy rains, which is expected to peak between the months of August and October, 2019.
She advised all farmers, especially those covered by the NAIC to strictly adhere to best agricultural practices, as they have already been educated by the corporation during various farmers sensitisation programmes on how to maintain sound house-keeping on their insured projects, thereby closing gaps of risk occurrence.
To consolidate on Federal Government’s seriousness in putting an end to the farmers’ plight, it, National Insurance Commission (NAICOM), issued licences to more operators for agric insurance business.
In the past, about $5 million was approved by Federal Government to enhance the activities of NAIC for adequate crop and livestock insurance, a gesture that was meant to support NAIC’s institutional reforms, strengthen operations and roll out agricultural insurance products.
The Federal Government said then that it understood the importance of risk management in agricultural investment and, therefore, decided to build its capacity and prepare it to effectively meet the insurance needs of the agricultural sector.
“As we continue to modernise the agricultural sector, we will ensure that farmers are protected from the effects of climate change. The devastating flood of 2012 was a wake-up call for the need to develop policies and risk transfer systems to protect the government and farmers from effects of climate change,” it said.
Last year, the rainy season, which typically runs from March to September, brought with it inevitable flooding, killing over 100 people.
The flooding, which submerged houses, farmland and other businesses, is always exacerbated by poor infrastructure and lack of planning to protect against the waters.
Already, flood has started taking over some parts of the country with houses and farmlands being submerged, thus exposing farmers to risk of losing their investment, considering the heavy rains still expected within the next few weeks into the month of October.
To further encourage the farmers, the management of NAIC had emphasised that the underwriting firm would always pay appropriate compensation to insured, whose agricultural farmlands were ravaged by the flood disaster across the country.
She urged insured farmers to make all efforts possible to avert and minimise the untoward effects of the torrential rains and floods on their farms by promptly informing the nearest NAIC office in their states of their travails so appropriate support will be extended to them in a timely manner with emphasis that the succour would be strictly for farmers insured under its policy.
Despite efforts by government and insurance firms, a practicing farmer, Mr. Anga Tonya, had blamed the poor utilisation of agric insurance on ignorance on the part of farmers.
He described agric insurance as the best form of support for farmers to recoup their investment in the case of losses.
He said: “Agric insurance is very good. Over the years, farmers have not utilised crop insurance adequately and as a result they suffered colossal losses. The reason actually is due to ignorance and that is still the same reason a lot of farmers are not involved in it.
“Another reason is the cost implication. Most of the farmers don’t know what it costs. They think it is very expensive whereas it is something they can afford if only they take time to find out.
“I believe the best thing to do, moving forward, is to sensitise farmers on the benefits. Basic knowledge and information would make a lot of difference. When they know it will protect their interest and crop, they will go for it.”
As the raining season typically sets in again with all the threats already being visible through early signs of disasters as typified by flooding, it is expedient for farmers to tow the path of wisdom by approaching any of the licensed agric insurer for advice and the best insurance product to ensure his investment does not end in vain.