To boost agric insurance and deepen market penetration in the continent, African insurers are considering food security programmes that give farmers better capacity for higher yields and encouragement for risk protection.

The programme, which more or less looks like social programme for food security, would support farmers with high-bred crops, training and fertilisers to enhance volume and quality of produce. And these, experts say, would not only increase premium income from agric business, but would also create more employment and reduce food shortage and poverty in African countries.

Bode Opadokun, managing director/CEO, Nigerian Agricultural Insurance Corporation, said it would be a major intervention for agric development in the continent, and an opportunity to increase market penetration for agric insurance. Opadokun said the Nigerian government was already implementing a programme called e-wallet system where larger and smallholder farmers were accessing high-yield crops, fertilisers and other incentives to boost productivity.

“Being that 2014 is the year Africa has declared food security, all of efforts were being put in place to strengthen capacity for food production through adequate insurance,” he said. Frank Gosselink, director, risk management, Cardano Development, said solving food security problem in Africa required improving agricultural productivity of smallholder farmers, stating that shortage of financial means was impeding productivity growth in the continent.

“Smallholder farmers occupy 50 percent of the farmers and serve only household needs, so adopting satellite-based crop insurance rather than weather-stating as common in most African countries would boost production and help insurance sector growth,” Gosselink stated.

At the just-concluded African Insurance Organisation (AIO) conference in Kigali, Rwanda, stakeholders resolved that food security was Africa’s most daunting challenge and that increasing farmers’ productivity was key to combating it.

According to them, it was therefore imperative for African insurance industry to adopt the use of technology in crop insurance using satellite images with a view to reducing the processes in claims management and settlement.

The stakeholders in their resolution also underscored the need for collaborative efforts in addressing Africa’s food security challenge and for the insurance industry to partner with agencies such as local banks, micro-insurance institutions, agricultural processers, buyers, government institutions and non-governmental organisations.

They further argued that “working together and harmonising efforts with a view to providing the most-needed finance to support agricultural development in Africa is the way to go”.

Source - http://businessdayonline.com/