By Chinyere Anyanwu [email protected]
In 2020, at the onset of the COVID-19 pandemic, pig farmers at the Lagos State Pig Farm Estate, Oke Aro, Ifelodun Union, located on its borders with Ogun State, lost a whopping N12.125 billion between the first week of March and end of June to African Swine Fever (ASF), a virus that affects pigs.
Except for the intervention the state government on humanitarian grounds, the affected farmers got no compensations for their huge losses as the livestock were not insured.
This is the experience of many livestock farmers across the country on a regular basis despite the offer of livestock insurance products by some insurance companies.
The Federal Government had established the Nigerian Agricultural Insurance Scheme (NAIS), which is being implemented and managed by the Nigerian Agricultural Insurance Corporation (NAIC).
It was set up to provide agricultural risks insurance cover to Nigerian farmers, to protect them from the effects of natural hazards to indemnify them sufficiently enough to keep the them in business and provide emergency assistance during periods of disasters.
Within the last five years, NAIC, according to records, has paid out about N2 billion as compensation to various categories of insured farmers across the nation. It has, however, insured less than two per cent of the farmers in Nigeria after almost three decades of its existence.
Giving reasons for the lethargy among Nigerian farmers over patronage of livestock insurance despite the huge losses they record on their farms year after year, observers blame lack of confidence and trust in the sincerity of insurance companies as well as the high premium charged for animals insurance cover among the major impediments.
For instance, President of the Lagos State Pig Farm Estate, Pastor Adewale Oluwalana, blamed the low patronage of livestock insurance on the Nigerians’ level of understanding of insurance and the inability of insurance companies to give prompt attention to their clients when the need for claims arise.
According to him, “people don’t trust insurance companies. Many farmers believe that even if you insure, when time for claim comes, they will bring all kinds of terms which were not there initially. This has put fear into a lot of people concerning insurance. Averagely in Nigeria, livestock farmers who are insuring their animals are very few considering the number of people who are engaged in the business. The level of insurance in livestock is low.”
For his part, Founder and Chief Executive Officer of Amicable Mondiale Farms, Amaka Chukwudum-Daniel, a crop and livestock farmer based in Abeokuta, Ogun State, cut throat premium rate charged by both privately-owned and government-owned insurance companies, among other bottlenecks, is the reason many livestock farmers shy away from insuring their animals.
Chukwudum-Daniel noted that the Nigerian system of insurance is not favourable to farmers. She lamented the high rate of premium and difficulty experienced in trying to secure insurance cover for livestock in both government and private insurance companies.
The young and vibrant farmer who lost 35 goats and rams last year, and 4,000 birds during the COVID-19 period, said she doesn’t have livestock insurance despite several efforts she had made to register in the livestock insurance scheme under the Anchor Borrowers Programme (ABP).
She said, “there was an insurance scheme brought by Anchor Borrowers Programme that almost claimed my head. The premium they calculated, if added to the cost of production and purchase of other inputs, could make you operate at a loss. As far as I am concerned in this place, you are on your own. So what I do is to do everything I can to make my farm work. That’s why I have to resort to the herders’ method of protecting their cattle – ‘local insurance’ with herbs.”
Reeling out the myriad of challenges she faces in the course of her farm operations, she said, among others: “Am I going to talk of the losses suffered through the dishonesty of staff. I had a staff in Iwo, Osun State, who used to turn my chickens upside down and when they die, he will inform me and I’ll tell him to dispose of them because as a rule, I don’t sell dead animals on my farm. But this young man who already has buyers will sell these chickens to them at N1,500; chickens that I normally sell for N4,500. If I was under insurance, they will not hear this kind of thing. They will tell you it’s mismanagement. So what’s the essence of paying them that premium.”
Regardless of these hiccups besetting the procurement of livestock insurance in the country, it is still a scheme that is critical to the survival and growth of the value chain.
The Managing Director, Nigerian Agricultural Insurance Corporation (NAIC), Mrs. Folashade Joseph, had in 2020 urged all tiers of government and other stakeholders to encourage farmers to insure their farms, as a loss of such investments due to natural and unnatural perils is a loss to the whole nation and not just to the farmer alone.
To ensure improvement in the patronage of livestock insurance by farmers, Pastor Oluwalana, president of the Lagos State Pig Farm Estate, urged insurance companies to be faithful to their clients, noting that, “when insurance companies begin to exhibit faithfulness in their dealings with their clients, the level of trust people have in them will increase and many people will be eager to do it because nobody wants to lose in any business. Lack of trust is the major hindrance to livestock farmers taking insurance covers for their animals.”
Amaka Chukwudum-Daniel, argued that government should take the lead in ensuring that livestock farmers invest in insurance cover for their animals. She said if government plays its role of providing subsidised insurance cover for farmers, they will be happy to embark on the scheme.
According to her, “livestock insurance can only become viable if government can help us because they are the only ones who can help us out here. Private insurance will always want to protect themselves and make money. The only way out is for government to establish a system of insurance for farmers. That is what is done in other countries. A system where farmers can register with a cooperative society and the cooperative in turn will register with the government-established insurance company so that in case of any massive loss, the cooperative will report to the insurance company for claims settlement. It’s only a government system of insurance that can help us.”