By Modupe Gbadeyanka

It is no doubt that agricultural production in Nigeria is faced with inherent and myriad of risks and prominent among them are input supply, price of inputs, agricultural yield, project prices and production risks due to effects of climate change or natural disasters.

It is important to note that the agricultural production risks always affect farmers and agribusiness in different ways, thereby affecting agricultural production and threatening food security in the country.

Agricultural insurance is the protection of farmers against the risks of natural disasters, pests and diseases in exchange for regular premium payments proportion to the likelihood and cost of risk involved.

Not many may know that in order to address agricultural production risks, the Federal Government of Nigeria established the Nigerian Agricultural Insurance Scheme, managed by Nigerian Agricultural Insurance Corporation (NAIC), to provide protection to farmers on the effect of natural hazards.

The scheme was launched on December 15, 1987, as part of its efforts to enhance and sustain food production in Nigeria in realization of the fact that most efforts to promote food production have not yielded much results, due largely to incidence of incremental weather conditions and the effects of natural hazards like floods, drought, pests, diseases, fire etc.

NAIC was established and incorporated by Act No. 37 of 1993 to operationalize the Nigerian Agricultural Insurance Scheme with the following key objectives:

* Provide financial support to farmers where losses to crops and livestock arise from natural hazards;

* Induce the provision of credit by financial institutions, as the insurance serves as an added collateral;

* Promote and enhance agricultural production by giving farmers confidence to accept new and modern innovations and inputs;

* Eliminate or minimize the need for Government to provide ad-hoc assistance to farmers during agricultural disasters.

Agricultural Items Covered by NAIC

The Scheme provide cover to all crops, livestock and tangible fixed assets like farm buildings, machinery, equipment, agricultural produce activities, warehousing and other Agro-processing activities.

Summary of items covered by NAIC include:

(a) Subsidized Crop – maize, rice, millet, yam, mixed crop, cassava, sorghum, vegetables, irish potato, sweet potato, soya beans, cowpea, pumpkin, melon, groundnut, sesame, wheat, peanut, coco yam, pepper, garlic etc.

(b) Subsidized Livestock – cattle, sheep, goat, poultry, fishery, pig, apiary, snailery, grass cutter, rabbitry etc.

(c) Commercial crop – cocoa, rubber, oil palm, horticulture, plantain, sugarcane, jatropha, ginger, cotton, tea, coffee, gum Arabic, pineapple, kolanut, tree crops etc.

(d) Commercial Livestock – dogs, horses, camel, donkeys, pets, zoo animals etc.

(e) Multi-Peril Cover (MPC) – combined trading, agroc-processing, storage rksks, ware-house activities etc.

(f) Tangible Fixed Assets – farm buildings, machinery, equipment, motor vehicles, fishing nets, outboard engines, fishing boats etc.

(g) Farmers, Farm Labour/Employees and their dependants.

(h) General Business – Motor vehicle, Fire and Special Perils, Burglary, Group Personal Accident, Money Insurance, Plant-All-Risks, Machinery Breakdown etc.

Perils Under Cover

The perils covered under the agricultural sub-sector are as follows:

(a) Subsidized Crops – The perils covered are comprehensive in nature and include fire, lightning, windstorm, flood, drought, pests and diseases.

Kindly read concluding part here: http://www.businesspost.ng/2017/01/27/how-to-insure-your-agricultural-projects-in-nigeria/