Uche Usim, Abuja
The Nigeria Incentive-based Risk Sharing System for Agricultural Lending (NIRSAL) says it is targeting to increase the number of farmers captured under its diverse agric insurance products from the current 1,476,289 to 3 million by 2026, in its efforts to guarantee food security in Nigeria.
The new product protects farmers from losses during a planting season caused as a result of bad weather in the form of low and high rainfall, early and late season dry spells, lightning, hailstorms and thunderstorms.
The Managing Director of NIRSAL, Mr Abdulhameed Aliyu made the disclosure in Abuja at the weekend, during the launch of Hybrid Multi-peril Crop Indemnity-Index Insurance in collaboration with Royal Exchange Insurance.
According to him, NIRSAL, in its efforts to deepen agric insurance product development, has not only partnered the public and private sector underwriters, but consistently drawn support from the National Insurance Commission (NAICOM) to facilitate the development of an innovative index-based Insurance product- the NIRSAL Area Yield Index Insurance product (AYII), which guarantees the income of the smallholder farmer by covering expected yield.
AYII, he said, was piloted during the 2017 wet season farming to great effect; covering 17,000 farmers and 10,000 hectares with a harvest value of N3 billion.
He regretted that Nigerian farmers and their families are often left to contend with the negative effects of many factors including bad weather, pest outbreak, disease outbreak, fire outbreak, permanent disability and even the death of the farmer.
Aliyu said: “Leveraging on the Insurance pillar, NIRSAL Plc aims to increase the distribution of existing and new agric insurance products from about 0.5 million farmers in 2017 to 3.6 million farmers nationwide by 2026. NIRSAL Plc has already reached a milestone of 1,476,289 smallholder farmers having subscribed to NIRSAL Plc’s already-developed insurance products in past farming seasons.
“The giant strides being made are as a result of our two-pronged approach. The first is the development of innovative insurance products like HM-II that speak to the needs of smallholder farmers while the second is the increase in the number of insurance companies that underwrite agricultural risk.
“Despite the success of AYII, NIRSAL Plc took feedback from farmers, leading to the development of the NIRSAL Comprehensive Index Insurance product (NCII) in 2018. While AYII covers just yield risk, NCII covers yield risk, market price risk, and life insurance.
“For sustainable economic diversification, growth and development to occur, agriculture must play a significant role. Besides the Agric sector’s contribution of about 24% to the country’s GDP, the sector is the largest employer of labour, providing jobs for more than 60% of the population”, he explained.
The NIRSAL CEO further stated that 80% of the sector’s contribution to the GDP is attributable to smallholder and subsistent farmers who are unfortunately the most vulnerable actors along the agric value chain.
In his remarks at the event, the Managing Director of Royal Exchange General Insurance, Mr Benjamin Agili stated that the Hybrid Index Insurance you product seeks to protect the small-holder farmers from farming loss during a particular faming season and has gone a step further by insuring the life of the farmer during the season in case of permanent disability or death, during the season, thereby ensuring the farmer is able to remain in business, no matter the loss or situation.
“Following the strategic investment in Royal Exchange General Insurance by the InsurResilience Investment Fund in 2019, the key attractive portfolio for the lIF was our agricultural insurance initiatives and this has seen us secure regulatory approvals, launch innovative agricultural insurance products, acquire technical and professional expertise and impact the small-Holder farmers nationwide through our various product offerings through strategic partnerships with various stakeholders in the agribusiness value chain.
Such partnerships include our working partnership with NIRSAL, AgriTask, Tel Aviv, RiskShield, Zimbabwe and Swiss Re, to mention but a few.
“Our corporate renewal and operational transformation is targeted at building an enduring insurance company of tomorrow; one which is able to innovate and build upon its current foundation to remain in business firstly and secondly, contend for market leadership”, he stated.