Nigerian farmers get N6.5 billion insurance cover 

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About N6.5 billion worth of insurance coverage has been provided for farmers across the country courtesy of the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL).

This was disclosed by the Managing Director/ Chief Executive Officer of NIRSAL, Mr Aliyu Abdulhameed at a Agribusiness Summit held in Lagos.

According to Abdulhameed, NIRSAL has developed and launched the Area Yield Index Insurance product. which protected up to N6.5 billion revenues of over 37,399 farmers, with over N121 million paid out as compensation.

The details: The Area Yield Index Insurance, according to Abdulhameed, covers the expected yield of smallholder farmers as it protects their revenues from losses due to pests, diseases, adverse weather conditions, and other disasters.

(READ MORE: 400,000 people benefit from NIRSAL scheme)

NIRSAL was said to have achieved the move of Nigerian agricultural insurance from indemnity-based to index-based insurance by involving and working together with local and international insurance operators.

Why this matters: The importance of the insurance cover for farmers cannot be overemphasized as it would help the smallholder farmers have something to fall back on when their crops or livestock get damaged.

It also has great potential to provide value to low-income farmers and their communities, both by protecting farmers when shocks occur and by encouraging greater investment in crops.

What you should know: The partnership between the Nigerian Insurers Association and NIRSAL was strengthened in 2017 planting (wet) season when five insurance companies participated in the consortium mainly under the NIRSAL facility, while more companies were expected to join in subsequent years, Punch reports.

(READ MORE: NIPOST now set to deliver 2000 outlets for proposed NIRSAL MFB)

NIRSAL had sought for the collaboration of the NAICOM in delivering its mandate under the insurance facility pillar and utilising the Anchor Borrowers’ Programme of the Central Bank of Nigeria. Its insurance facility pillar was designed to expand insurance products for agricultural lending to agricultural primary producers and help reduce credit risks and increase lending across the entire value chain.

About NIRSAL: The Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL Plc.) is a US$500 million Non-Bank Financial Institution wholly-owned by the Central Bank of Nigeria (CBN) created to redefine, measure, re-price and share agribusiness-related credit risks in Nigeria.