Agriculture: Evidence-Based Insurance Road Map For Farmers Launched

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BY AGBO-PAUL AUGUSTINE, Abuja

A working paper that contains a roadmap for evidence-based insurance development for Nigeria’s farmers have been launched in Abuja.

The public presentation of the working paper No. 218 is an outcome of a consultative process that began in September 2014 between the Federal Ministry of Agriculture and Rural Development and the CGIAR Research Program on Climate Change, Agriculture and Food Security (CCAFS).

The research was aimed to overcome the problems of moral hazard, adverse selection, and resulting high transaction costs and processing delays that have plagued indemnity-based agricultural insurance. Index based insurance makes it feasible to insure millions of smallholder farmers.

Launching the document at the headquarters of the Ministry of Agriculture in Abuja, permanent secretary of the Ministry, Dr Bukar Hassan, represented by the director, Lands and Climate Change, Engr. Sunday Edibo, said the launch is coming at no other time than now that the challenge of climate change has become impactful particularly to the agricultural sector and most especially to the small hold farmers in the country.

He commended the thoughtful foresight and collaborative efforts of CLAT, CCAFS of the CGIAR and the Ministry for the achievement.

“As you are aware, 70 per cent of the population is engaged in agriculture while agriculture contributes about 24 percent to the Gross Domestic Product (GDP).

“Yet our agriculture is rain fed dependent, that is, farmers rely hugely on the vagaries of weather and climate.
“Though, it has been acknowledged that climate change is a global phenomenon and a reality, its impacts has been devastating as floods or drought can wipe out the entire harvest of farmers. This was the case of our farmers in 2012 and recently in 2017,” he said.

Hassan, stated that to ensure food security and nutrition, farmers should insure their crops and obtain some financial support in the event of the occurrence of any disaster.

“This is the new direction, a paradigm shift practices in the developed and developing countries. Nigeria should not be left of this robust and tested scientific endeavour. This, perhaps, is the reason we are here today to launch an Insurance Roadmap Document for Nigerian Farmers developed by CIAT in collaboration with the Ministry.”

He also noted that the launch strengthens the role of insurance in Nigeria’s agricultural resilience policy, through improved data management and sharing, and by building awareness among farmers and the financial sector to support new insurance and financial packages for farmers.

Speaking on the occasion, CCAFS flagship 4 leader and a senior research scientist at the International Research Institute for Climate and Society (IRI), New York, USA, Dr James Hansen, said well designed index insurance can achieve specific risk objectives such as protecting farmers livelihoods in the face of major climate shocks, and promoting farmers’ livelihoods by overcoming barriers to adoption of improved agricultural technologies and practices, and access to market opportunities.
He said agriculture insurance is a well-established crop farmers’ resilience in the face of various production risks.

“The United States Federal Recover Insurance Corporation, for example, was created in 1938 to help the agricultural sector 2015) from the Great Depression and the Dust Bowl drought.

“Agriculture insurance in the United States has, over the years, proven to be more efficient than providing post-disaster payments to farmers. Globally, insurance products have evolved to become more cost-effective, and to reach both large and small-scale farmers.

He said the federal government in partnership with the private sector, can address the challenges in the agricultural insurance sector if the right strategy is implemented.