Sir Oyegunle, CIIN President
The agricultural sector over the years has remained the bedrock of Nigeria economy contributing N10.50 trillion to nation’s Gross Domestic Product (GDP) in 2019. In spite these contributions, the sector is still relatively dominated by smallholder farmers and clogged with enormous risk challenges.
Determined to throw light on the importance of the sector with special emphasis on smallholder farmers, the Chartered Insurance Institute of Nigeria (CIIN) focused the its 2020 annual education seminar on how to grow the sector and the role of insurance in this value chain.
The President of the CIIN, Sir, Muftau Oyegunle, in his address at the opening of the seminar with theme: “Managing Small Holder Farmers; The Insurance Perspective” which was held virtually, said smallholder farmers are the drivers of many economies in Africa even though their potential is often not brought forward, pointing out that smallholder only refers to their limited resource endowment relative to other farmers in the sector.
He posited that this form of Agricultural production faces a lot of risks, adding that some of these risks include risks caused by potential volatility in prices, damage to crops or livestock, production risk resulting from uncertainty about the levels of production that primary producers can achieve from their current activities amongst others.
Oyegunle maintained that insurance operators owe it as a duty to understand and be able to assess the risk smallholder farmers are exposed to and be able to develop relevant policies to help them.
He also noted that as risk managers, it is the lot of insurance operators to increase the tempo of campaigns for insurance awareness and professionalism in order to get more people to stand up and take notice and for more Nigerians to embrace insurance as a profession and as a service offering.
The President of the Institute reiterated that the Chartered Insurance Institute of Nigeria would continue to leverage on all platforms to ensure the propagation of insurance education, awareness and the highest levels of professionalism obtainable in the industry, adding that Institute’s creed is centered on its mandate to provide world class manpower with the highest standard of professional and ethical training for the Nigerian and International business community.
The Managing Director/CEO, Nigeria Agricultural Insurance Corporation (NAIC) Mrs. Folashade Joseph, delivering the theme paper entitled: ‘Management of Smallholder Farmers: The Insurance Perspective’ noted that smallholder farmers are responsible for about 98 per cent of locally produced food consumed in Nigeria, adding that 80 per cent of the total farmers, including medium and large ones are smallholder farmers.
She posited that smallholder farmers are the backbone of Nigerian Agricultural sector and they deserve every support to enable them produce more food, grow more raw materials for the agro-industrial sector and contribute in the ending a food deficit that cost the country $20 billion in food import annually.
Mrs Joseph maintained that it is noteworthy that smallholder farmers having been applying most of the ex-ante and ex-post methods for years without achieving desired level of income stabilization, with the advent of formal agricultural insurance system, the smallholder farmers could not only avoid devastating financial losses, but such insurance would also act as a major potential enabler of progress by limiting farmers’ downside risk from investing in their productive capacity.
She opined that the way forward into giving cheap, adequate and accessible insurance cover to smallholder farmers will entail conducting and intensifying farmers education; swift adaption of available technology for operations of insurers; insurers getting more innovative and more.
The NAIC boss maintained that it should be noted that not all the risks faced by smallholder farmers are insurable, but stressed that part of those risks could be insured if insurance payouts reach the insured quickly enough.
Senior Manager in Agricultural Value Chain Finance and Investment Services business unit of NIRSAL (Nigerian Incentive – based Risk sharing System for Agricultural Lending). Mr. Opeoluwa Ogundipe, who spoke on ‘’Building Competitive Advantage Through Customer Satisfaction’’ noted that farmers are not only keen on protecting their produce from natural disaster, they are also interested in producing more in order to increase their income and that a lot of the mistrust the insurance companies have suffered in the past is due to lack of proper education.
He stressed that a significant number of farmers reported losses that were not of natural occurrence but as a result of bad agricultural practices, adding that when the farmers report these losses to insurers and claims are not paid because investigations have revealed that the insurer is not liable, there is a breakdown in trust stemming from misinformation and their negative perception of insurance offerings are greatly increased.