Minister of Agriculture and Rural Development, Dr. Akinwumi Adesina has warned farmers of the possibility of extreme weather conditions and the need for them to upscale their investments in agricultural insurance to protect them from unexpected losses.
Adesina, stated this at the opening of the Lagos Zonal Headquarters of the Nigerian Agricultural Insurance Company, (NAIC) stressing that the devastating floods of 2012 was a wake-up call for the need to develop policies and risk transfer systems to protect government and farmers from effects of climate change.
He noted that to address the challenge posed by the floods, President Jonathan approved the launch of the flood recovery food production policy to immediately swing into action and produce food massively in the dry season. The national dry season policy, the first in Nigeria’s history, allowed Nigeria to rapidly recover from the impacts of the flood.
The minister who was represented by Mr. Lekan Quadry, the south-west regional director, in the ministry said: “As we continue to modernise the agricultural sector, we will ensure that farmers are protected from the effects of climate change.
“But as we go forward we must recognise that extreme weather effects are likely to become more common due to climate change. To ensure that farmers and agribusinesses are protected there is need to scale up agricultural insurance programs.”
Agriculture has saved the Nigerian economy. Despite the depreciation in the value of the Naira and the collapse in the price of crude oil, food prices have been largely stable, which has provided fiscal buffers and helped to strengthen fiscal and macro-economic stability.
He stated that in acknowledgement of the importance of risk management in agricultural investment, the Federal Ministry decided to reposition NAIC in order to build its capacity and prepare it to more effectively meet the insurance needs of the agricultural sector.
“Our focus is to promote affordable crop and livestock insurance products for farmers and insurance products for agribusinesses. Government is supporting the development of weather index insurance products for farmers, improving access to climate information and expansion of Agro-Metereological stations. Both agricultural insurance and reinsurance are being rapidly developed. Our goal is to ensure that in the next three years over 15 million farmers are covered by crop and livestock insurance.
“I have given directive to the National Agricultural Insurance Company (NAIC) to totally reform and reposition agricultural insurance. To ensure this, I have directed the release of $ $5 million to NAIC to support its institutional reforms, strengthening of its operations and roll out of agricultural insurance products. I have also directed that NAIC ensures that it works with global reinsurance companies to make agricultural insurance in Nigeria of global standard.
“Presently, NAIC is undergoing a restructuring exercise under a new MD/CEO, Mr. Bode Opadokun, supported by hard working and Energetic Board of Directors. The aim is to ensure that it delivers flawless and efficient risk management services to all the participants in the agricultural sector.
“I am very pleased to note that the Corporation recently designed a crop insurance distribution channel that has been adopted by the Federal Ministry of Agriculture. Government is rolling out this insurance products via the electronic wallets on mobile phones of farmers. Under the program called “Planting with Peace” farmers will be insured for every bag of seed and fertilizer purchased, following payment of a modest premium,” Adesina said.
He assured that the Corporation has the full support of his Ministry in fulfilling its statutory mandate of the provision of adequate risk management services to the agriculture sector in Nigeria.