Due to lack of insurance cover, Agric sector loses N20bn annually.
NIGERIA’s agricultural sector losses about N20 billion annually due to failure of insurance companies to create products to cover small farmers. Stakeholders in the agriculture sector stated this while speaking at the 2018 national insurance brokers’ conference and exhibition in Lagos, noting that the absence of insurance cover for smallholder farmers is part of the reason why livestock agriculture is not growing in Nigeria.
Speaking on the theme, ‘Insurance industry: survive, thrive,” Dr. Kolade Adebayo, Executive Director, Zynosism Nigeria Ltd, said that the insurance sector should create products that capture small farmers. Adebayo stated: “The absence of insurance products for small farmers is costing the agricultural sector over N20 billion annually. We need insurance products that will aggregate small farmers cooperatively and provide cover for them. As such, insurance companies need to deal with poultry associations, rice farmers association and so on so that agricultural produce can be enhanced.
“Risk is an integral element of the farming industry, but the challenge we are having is that we don’t have the insurance partnership to cover most of our risks. The association of livestock farmers usually organize annual agric forums where we come together to discuss issues. For years we have always invited stakeholders from other sectors to rob minds together on ways of moving agric business forward.
For over ten years that we have been having this forum, while we have had many representatives from other sectors, we only see one person from the whole of the insurance industry. This is not good for the insurance sector.” Speaking further, Mr. Biodun Oladapo, Chairman, SME Trade Group, Lagos Chamber of Commerce and Industry, LCCI, said that the livestock business is still stunted in Nigeria because over the years there has not been insurance support to give it a boost.
Oladapo said, “We have seen little growth in livestock business in the country because we have not had adequate insurance support. Any farmer that has any insurance cover today got it because they wanted bank loans. Unfortunately, no bank in Nigeria will give any farmer loan without insurance cover.
“For the farmers that have insurance, when cows enter a rice farm and eat up the rice, the insurance companies will tell you that ‘cow eating rice’ was not covered. At the end of the day, no claim will be paid and the farmer is abandoned to his fate. Such incidents have contributed in impoverishing many farmers and the experience is causing apathy between us and insurers. So there is need for the insurance sector to introduce products that will cover all our risks.” Responding to the concerns raised, President of the Nigerian Insurers Association, NIA, Mr. Tope Smart, said that the insurance industry need to partner with the agricultural sector going forward as part of measures to survive and thrive. Smart stated: “The insurance sector is under threat of survival, as such, it should re-strategize and innovate to continue to exist.”