Making a presentation on Agricultural Insurance at the annual AIICO Insurance training for members of the Nigerian Association of Insurance and Pension Editors (NAIPE) in Lagos, Mr. Leonard Okereafor, Agric & Emerging Risk Manager of AIICO, stated that the role of insurance in the sustainability of Nigeria’s agric/agribusiness sector cannot be over emphasised.
Okereafor listed the benefits of insurance to farmers to include income stability, facilitates access to loan, enhances strategic partnerships, peace of mind, and is a source of effective risk management.
He said: “There is need to develop a workforce with new skills, values and attitudes to enhance improved productivity and ensure food security. One of the key drivers for transformation is agribusiness.”
According to him, agriculture is the practice of cultivating land, raising crops, and rearing livestock, while agribusiness is the input supply, farming operations, processing and manufacturing, distribution and marketing, retail and export, economic and business aspects of agriculture.
“While the scope of agriculture focuses on farming practices, agribusiness encompasses the entire value chain. In respect to scale, agriculture includes small-scale and subsistence farming, while agribusiness involves larger-scale commercial operations. Also, while the focus of agriculture prioritises food production, agribusiness emphasises profitability and market competitiveness.”
Okereafor listed the agribusiness value chain to include input supply, production, post–harvest services, trading post harvest, processing, trading processed items, as well as retail.
He however noted that constraints to the development of agribusiness in Nigeria include: limited access to modern agricultural technology, inadequate extension education/services, absence of robust market links, issues surrounding inputs, agricultural credits, inadequate availability and access to financial solutions.
According to him, AIICO’s agricultural insurance offerings to Nigerian farmers and agribusiness investors fall under Indemnity and Index-based.
He said: “Under Indemnity insurance, we offer poultry, fish farm, livestock, plantation fire, farm property/produce, multi-perils crop. Under Index-based insurance, we offer area yield index-based, weather index-based as well as bundled/hybrid policies.”
For poultry insurance policy, he said: “This product covers birds (broilers, layers, parent stock, grand–parents stock, hatchery stock, cockerel, ornamental birds) against death as a result of fire, lightning, windstorm damage, flood, uncontrollable disease and accident. For fishery insurance policy, this policy insures fish against death and fish pond against collapse as a result of fire, lightning, windstorm damage, flood, uncontrollable disease and accident. For livestock insurance policy, this policy insures livestock (e.g. cattle, sheep, goats, rabbits, and pigs) against death caused by fire, lightning, windstorm, flood, accident, and uncontrollable disease. For plantation insurance policy, this policy covers cocoa, sugar cane, oil palm and other plantation farms against loss or damage as a result of fire, lightning, flood, windstorm, and aircraft perils. For farm property insurance policy, this policy provides cover against loss of, or damage to, farm property (e.g. warehouse and farm equipment) and agricultural produce as a result of fire, burglary/housebreaking, lightning, flood, windstorm, explosion, aircraft, earthquake, and impact risks. For Multi-Perils Crop (MPCI) Insurance policy, this policy insures your farm against loss of, or damage to, your crop caused by fire, lightning, explosion, aircraft damage, windstorm, flood and outbreak of uncontrollable pest and disease. The coverage provided by this policy will pay for the production costs of crops that have been lost or damaged during the period from planting up to the maturity of the crop.”
