Agriculture plays a vital role in the Nigerian economy and a critical source of growth in many developing countries. It is also a means of livelihood for the rural populace and a source of investment opportunities for the private sector.
However, Agriculture is exposed to adverse natural events, such as drought, flood, windstorm, pest, diseases, etc. The impact and economic costs of such disasters may increase further in the near future because of climatic factors occasioned by climate change. These events, in most cases, can lead to the impoverishment of farmers if not checked or controlled.
Agricultural Insurance is a veritable tool that Agricultural producers can use to mitigate and manage the risks associated with adverse natural events and disasters. Agricultural Insurance is important to Nigerian farmers in view of its role in Agricultural development as it complements and enhances risk management activities.
The Nigerian Agricultural Insurance Scheme (NAIS) which is implemented and managed by the Nigerian Agricultural Insurance Corporation (NAIC).
The Corporation is to implement, manage and administer the scheme, offer protection to the farmers from the effects of natural hazards, ensure payment of appropriate compensation sufficient to keep the farmers in business after suffering a loss, promote Agricultural production and encourage the flow of Agricultural credit facilities from banks and other lending Institutions to the farmers.
Benefits of NAIC Agricultural Insurance cover to farmers include but are not limited to the following:
- NAIC Insurance Cover is for All Farmers
The NAIC Agricultural Insurance cover is designed for all categories of farmers namely; small, medium, or large scale. These farmers can either be in groups, Cooperative Societies, individuals or corporate entities. Therefore, NAIC Insurance cover is available for all categories of farmers irrespective of the farm size, financial strength, and Agricultural enterprise.
- NAIC Cover Targets Rural Farmers
The Nigerian Agricultural Insurance Scheme targets rural farmers irrespective of their farm size and number of livestock.
- Geographical Spread and Accessibility
The Corporation can be accessed in all parts of the country with ease. The Corporation has its Head Office in Abuja, Six (6) Zonal offices in Asaba, Bauchi, Ibadan, Katsina, Minna and Owerri, and Branch offices in all the Thirty-Six (36) States of the Federation.
- Peace of Mind
The NAIC Agricultural Insurance cover offers protection to the farmer from the effects of natural disasters by providing peace of mind that in the event of any insured loss, NAIC will offer appropriate compensation sufficient to keep the farmer in business after suffering such a loss.
- Increased Agricultural Production
Basically, as Agricultural Insurance cover provides compensation for financial losses incurred as a result of natural disasters, farmers have increased confidence to invest more in Agriculture with a consequent increase in Agricultural production.
- Collateral for Loans
The NAIC Agricultural Insurance cover assists farmers to obtain Agricultural loans from Banks and other lending Institutions.
- Increased the Flow of Agricultural Credit
There has been increased lending to Agriculture over the years as a result of NAIC Insurance cover. Lending Institutions have the confidence to disburse more funds for Agricultural production.
- Multi-Peril Cover
Generally, Agricultural insurance crop policies all over the world cover a single peril. However, NAIC operates a multiple peril crop policy, providing cover for the following risks: fire, lightning, windstorm, flood, drought, diseases and pests in one policy. This feat has received commendations from highly respected International Institutions.
- Provision of Customized Insurance products
NAIC agricultural insurance cover can be customized or tailor-made to suit the specific needs, yearnings, and aspirations of farmers and agricultural investors.
- Premium Subsidy
NAIC agricultural insurance premium rates are subsidized to the tune of 50% by both the federal and state governments where projects are located. Therefore the farmer pays only 50% of the calculated premium.
- Financial Stability for Farmers
NAIC’s claim compensation stabilizes farmers financially, particularly during disasters, which in the long run ensures financial stability in the Agric. business sector, since losses due to natural hazards are indemnified.
12. Adoption of Farming practices/ Techniques
NAIC agricultural insurance cover gives the farmer greater confidence in adopting new and improved farming practices and techniques which lead to greater investments in agriculture for increased output.
- Reduce Reliance on Government Assistance
NAIC agricultural insurance cover reduces farmer’s reliance on Government for ad-hoc assistance during natural disaster which in most cases may be inadequate.
14. Risk Management / Farm Advisory Services
The corporation has experienced professionals in different areas of agriculture and insurance who provide risk management and farm advisory services to farmers free of charge in form of extension service, counseling and general risk improvement/measures which add value to their agricultural activities.
15. Prompt Response and Claims Settlement
The Corporation is currently one of the few insurers that can boast of having a clean and impressive record on claim settlements. In NAIC, claims are paid to farmers promptly and unfailingly.
Agriculture plays a significant role in the Nigerian economy. Farmers play a pivotal role in the success or failure of the agricultural industry but are the ones suffering from loads of debts, poverty, and natural calamities that ravage their agricultural enterprises.
Benefits accruing to Nigerian farmers are innumerable under the Nigerian agricultural insurance scheme (NAIS) which has evolved to provide benefits to farmers. The corporation, therefore, has over the years achieved its main objective of addressing agricultural production risks by way of providing protection to farmers and ensuring payment of indemnity from natural hazards.
Finally, all are enjoined to key into the Nigerian Agricultural Insurance scheme by insuring with NAIC