The Chairman of the Nigerian Agricultural Insurance Corporation (NAIC), Mrs. Chioma Ohakim, has identified flood as a result of abnormal and excessive rains as the greatest risk facing both farmers and agricultural risks insurers in the country. She spoke with Nnamdi Duru
What benefits would farmers get when they insure their risks?
The Nigerian Agricultural Insurance Scheme is subsidised by the Federal and State Governments to the tune of 50 per cent in the proportion of 37.5 per cent and 12.5 per cent respectively. Thus, the farmer is required to pay only 50 per cent of the premium payable and the subsidy is applicable on food items only as commercial rates are charged on non-food items.NAIC offers the best subsidy to farmers as far as agriculture is concerned in Nigeria as the subsidy funds cannot be diverted by any means. It is one unique subsidy that has gets to the beneficiaries, farmers.
We have many peasant farmers across the country. How much do they know about the subsidy, NAIC and agricultural insurance?
Peasant or rural farmers make up 70 to 80 per cent of the farmers and majority of them are not enlightened about the scheme. Awareness creation to us is a journey and not destination and as such, the corporation has been making efforts through various ways to ensure that farmers are well enlightened.
We do undertake in sensitisation programmes. We just concluded sensitisation in the six geo-political zones of the country. We do undertake publicity via radio jungles and advert placements in five languages namely; English, Pidgin English, Hausa, Yoruba, and Igbo.
What types of risks in agricultural business does NAIC insure?
NAIC services cover every activity across the agricultural value chain. The risks covered in crops are drought, flood, windstorm, rainstorm, fire, pests and diseases while in livestock, the risks covered are death and injury due to accident, disease, fire, lightening, storm and flood, etc.
What other services do you render to farmers apart from insuring their risks?
Apart from insuring the farms, it is in the culture of NAIC to carry out periodic visits to insured projects and group farmers who are yet under cover. Such visits are carried out by experts, veterinarians and a host of other experts. The visit provides advisory services to farmers on best farming practice that enhance efficiency in production and risk management.
Do small scale farmers also insure with NAIC?
The scheme was established for the benefit of all categories of farmers including small, medium, and large scale farmers either in groups or as individuals. Therefore, anyone or everyone involved in agricultural activity from pre-production, processing and other post harvest activities are entitled to enjoy the services of the corporation.In addition to the above categories of farmers, the scheme is mandatory for all beneficiaries of all agricultural credit facilities of banks and other lending institutions.
Government has been giving loans to farmers, are these loans insured by NAIC in line with the law?
NAIC is an agency of government primarily mandated to insure agricultural risks. Therefore, NAIC does not operate in isolation as it has good working relation with all stakeholders, particularly the Bank of Agriculture (BOA) and all agricultural agencies at the federal and state level.As the scheme operates a mandatory cover, all agricultural loans from banks, financial institutions and other agricultural agencies are mandatory insured with NAIC.
Flood ravaged some parts of the country recently, leading to loss of farms and livestock. How much of flood claims have NAIC paid in recent times?
Claims payment is one of the most important functions of any insurance outfit. In fact, prompt claims response is a primary function of any credible insurance firm. Therefore at NAIC, claims are treated and paid immediately.The corporation has so far paid over N500 million to farmers who had suffered from the 2012-2013 floods across the country.
As a follow up to that, how much claims generally has NAIC settled since the beginning of this year?
As earlier mentioned, claims are treated and paid with dispatch. The insureds are always encouraged to report claim incidence promptly to enable verification and commencement of processing. From January to date over N220 million has been paid as claims by the corporation to farmers across the country and more claims are under processing for immediate settlement.
From your experience, what is the major risk faced by Nigerian farmers in recent times?
In the last two years most farmers experienced flood and due to excessive or abnormal rains occasioned by climatic factors and related conditions.
How accessible is NAIC to farmers in other parts of the federation outside Abuja?
The corporation is highly accessible to farmers nationwide as it has operational bases in all the 36 states of the federation and the Federal Capital Territory (FCT).In addition there are six zonal offices in each of the geo-political zones that supervise the states offices. The zonal offices are located in Asaba, Bauchi, Ibadan, Katsina, and Owerri. Plans are underway to open more offices at the Local Government level to enable easy accessibility by the rural farmers.
How will the federal government’s plan to deregulate agricultural insurance business affect NAIC?
NAIC is not in any way against the deregulation of agriculture insurance business as the deregulation will broaden the agricultural insurance market and bring about the much needed competition, dynamism and innovation in the agricultural insurance sub-sector of the industry. The deregulation when implemented will spur NAIC to greater and better performance.
However, it is my opinion that the liberation of agricultural insurance business is likely to have a negative impact on Nigerian farmers who are already burdened with high input cost of agricultural production. It will lead to hike in agricultural insurance premium.
Does NAIC do other types of insurance business?
Yes, NAIC underwrites other type of risks apart from agricultural risks. We underwrite policies in general business such as fire, burglary, motor, marine (hull and cargo), goods-in-transit, performance bond, etc. The enabling act of the corporation empowers it to underwrite these other classes of business except aviation of life.
What is NAIC’S role in agriculture development in the country?
The overall objective of the Nigeria’s agricultural development is self-sufficiency and food security and this broad objective can only be sustained through series of good policies, strategies, in-service delivery, effective marketing and efficient management.Agriculture, unlike many other investment activities is exposed to variety of risks and uncertainties, particularly dues to climate change. Therefore, the role of NAIC as implemented by the federal government is to manage risks involved in agricultural business thereby contributing to the development of agriculture in the country.
What is the way forward for agriculture in the country?
Agricultural production in Nigeria is associated with various types of risks such as input supply, price, agricultural yield, product prices and production risks due to the effects of climate change.
The Agricultural Transformation Agenda (ATA) of the federal government is the largest ever government-enabled private sector led effort to develop agriculture. In my opinion, a holistic implementation of the transformation agenda will make the agricultural sector more productive, efficient and competitive and thereby ensuring the growth and development of agriculture in Nigeria.
Source - http://www.thisdaylive.com/
