A new report launched recently outlines roadmap to expand insurance to help Nigeria’s smallholder farmers cope with extreme weather as they transition to more productive and profitable agriculture.
The insurance roadmap outlines the steps needed, support from public-private sector partnerships, to develop new index-based insurance products to protect Nigeria’s agricultural transformation from the impact of climate-related risks.
Dr. Robert B. Zougmoré, Africa Program Leader of the CGIAR Research Program on Climate Change, Agriculture and Food Security (CCAFS) said: “Farmers rely on the climate. Drought or floods can wipe out their entire harvest, which represents an income for the year. If farmers can insure their crop, and get some financial support in the event that their harvest fails, that provides them with financial security and food security.”
Dr. Debisi Araba, Africa Regional Director for the International Center for Tropical Agriculture (CIAT) said the roadmap is the first of its kind to consolidate a wide range of evidence about what crops are most at risk, and during which times in the crop cycle.
He explained: “With that evidence, we can work with the financial sector to define what constitutes a climate disaster, so they can regulate pay-outs and an index-based insurance scheme. We can also support financial lenders to help farmers pay the money back over a longer-time period, like after a good season and good harvest.”
Dr. Jonathan Hellin, Senior Scientist at the International Maize and Wheat Improvement Center (CIMMYT) said where most clients of financial lenders can provide details of a salary, farmers can’t depend on a salary from their harvest because the weather could destroy it.
He added: “It’s time that changed – and in Nigeria, we are making excellent headway with this roadmap which should go some way to iron out high transaction costs, processing delays and the lack of financial assets that really disadvantage farmers compared with other borrowing clients.”
The roadmap also outlines next steps to fast-track inclusive insurance for Nigeria’s agriculture sector. These include forming a public sector task force to champion insurance for smallholders; providing incentives for public and private sector to manage high costs for the new products; and introducing a pilot phase to introduce lenders, farmers and policy makers to the initiative.