AIICO Insurance Plc has called for sustainable policies that agricultural sector stakeholders can latch onto and collaborative efforts to change the fortunes of the sector and the country.
This opinion of AIICO was driven by the the leading insurers Agric & Emerging Risk Manager Mr. Leonard Okoroafor while presenting lead paper on Agricultural Insurance at the annual AIICO Insurance training for members of the Nigerian Association of Insurance and Pension Editors (NAIPE) in Lagos, he said insurance role in this sustainability mainframe cannot be over emphasised.
Okereafor who listed the benefits of insurance to farmers to include income stability, access to loan, strategic partnerships, peace of mind, and is a source of effective risk management said there is need “develop a workforce with new skills, values and attitudes to enhance improved productivity and ensure food security.” Pushing it further he said, “One of the key drivers for transformation is agribusiness.”
Straightening out the differences of agriculture and agricbusiness he said the first is the practice of cultivating land, raising crops, and rearing livestock, while agribusiness is the input supply, farming operations, processing and manufacturing, distribution and marketing, retail and export, economic and business aspects of agriculture.
“While the scope of agriculture focuses on farming practices, agribusiness encompasses the entire value chain include input supply, production, post harvest services, trading post harvest, processing, trading processed items, as well as retail. In respect to scale, agriculture includes small-scale and subsistence farming, while agribusiness involves larger-scale commercial operations. He said a lot of investment is required in this sector to attain the threshold of food sufficiency, storage and even export. But agriculture prioritizes food production, agribusiness emphasizes profitability and market competitiveness.”
However, he noted that constraints to the development of agribusiness in Nigeria include: limited access to modern agricultural technology, inadequate extension education/services, absence of robust market links, issues surrounding inputs, agricultural credits, inadequate availability and access to financial solutions.
He said the involvement of insurance is offering Nigerian farmers and agribusiness investors indemnity and index-based risk protection. “Under Indemnity insurance, we offer poultry, fish farm, livestock, plantation fire, farm property/produce, multi-perils crop. Under Index-based insurance, we offer area yield index-based, weather index-based as well as bundled/hybrid policies.”
He said poultry insurance policy covers birds (broilers, layers, parent stock, grandparents stock, hatchery stock, cockerel, ornamental birds) against death as a result of fire, lightning, windstorm damage, flood, uncontrollable disease and accident. Another cover, fishery insurance policy, insures fish against death and fish pond against collapse as a result of fire, lightning, windstorm damage, flood, uncontrollable disease and accident. For livestock insurance policy, this policy insures livestock (e.g. cattle, sheep, goats, rabbits, and pigs) against death caused by fire, lightning, windstorm, flood, accident, and uncontrollable disease.
Plantation insurance he explained covers cocoa, sugar cane, oil palm and other plantation farms against loss or damage as a result of fire, lightning, flood, windstorm, and aircraft perils. For farm property insurance policy, this policy provides cover against loss of, or damage to, farm property (e.g. warehouse and farm equipment) and agricultural produce as a result of fire, burglary/housebreaking, lightning, flood, windstorm, explosion, aircraft, earthquake, and impact risks.
“For Multi-Perils Crop (MPCI) Insurance policy, Okoroafor said, this policy insures your farm against loss of, or damage to, your crop caused by fire, lightning, explosion, aircraft damage, windstorm, flood and outbreak of uncontrollable pest and disease. The coverage provided by this policy will pay for the production costs of crops that have been lost or damaged during the period from planting up to the maturity of the crop.”
