AIICO Insurance Plc has called for a united effort among stakeholders to revitalize Nigeria’s agricultural sector, emphasizing the critical role of insurance in enhancing sustainability and profitability. Mr. Leonard Okereafor, the Agric & Emerging Risk Manager at AIICO, made this appeal during a presentation on Agricultural Insurance at the annual AIICO training for members of the Nigerian Association of Insurance and Pension Editors (NAIPE) in Lagos.
In his presentation, Okereafor highlighted several benefits of agricultural insurance for farmers. He stated that insurance provides income stability, facilitates access to loans, fosters strategic partnerships, offers peace of mind, and serves as a crucial tool for effective risk management. “There is a need to develop a workforce with new skills, values, and attitudes to enhance improved productivity and ensure food security. One of the key drivers for transformation is agribusiness,” he explained.
Okereafor drew a distinction between agriculture and agribusiness, noting that agriculture primarily focuses on cultivating land and raising livestock, while agribusiness encompasses the entire agricultural value chain. This includes input supply, farming operations, processing, distribution, and marketing. He emphasized that while agriculture is primarily concerned with food production, agribusiness places a greater emphasis on profitability and market competitiveness, highlighting its potential to drive economic growth.
To support his points, Okereafor outlined the agribusiness value chain, which includes input supply, production, post-harvest services, processing, trading, and retail. He identified several constraints hindering the development of agribusiness in Nigeria, such as limited access to modern agricultural technology, inadequate extension services, weak market links, and insufficient financial solutions. “These challenges must be addressed to unlock the potential of Nigeria’s agricultural sector and create a robust agribusiness ecosystem,” he urged.
AIICO offers various agricultural insurance products designed to cater to the unique needs of Nigerian farmers and agribusiness investors. Okereafor detailed the two main categories of insurance: Indemnity and Index-based insurance. Under Indemnity insurance, AIICO provides coverage for:
-Poultry Insurance: This policy protects against the death of birds—including broilers, layers, and hatchery stock—due to fire, lightning, flooding, disease, and accidents.
– Fishery Insurance: This policy ensures fish and fish ponds against death and structural collapse resulting from environmental perils.
Livestock Insurance: This coverage covers cattle, sheep, goats, and other livestock, protecting them against death from fire, flooding, accidents, and diseases.
– Plantation Insurance: This product covers crops such as cocoa and oil palm against damage from fire, flooding, and other environmental hazards.
– Farm Property Insurance: This insurance protects farm property, including warehouses and equipment, against loss or damage from various risks.
– Multi-Perils Crop Insurance (MPCI): This policy insures crops against loss or damage caused by fire, flooding, pests, diseases, and other threats, covering production costs for crops lost or damaged during their growth cycle.
Okereafor also emphasized the importance of insurance in managing the risks associated with agriculture, noting that the unpredictable nature of climate and market conditions makes insurance essential for ensuring the continuity and growth of agribusiness. He remarked, “Farmers and agribusiness owners must understand that insurance is not just an expense; it is an investment in their business’s resilience and future profitability.”
As the agricultural sector faces various challenges, including climate change and economic volatility, AIICO Insurance is committed to supporting farmers and agribusinesses through tailored insurance solutions that address their specific needs. Okereafor concluded by urging stakeholders to engage in dialogue and collaboration to strengthen the agricultural insurance framework in Nigeria, ensuring that farmers can access the necessary financial tools to thrive.
In a broader context, AIICO’s initiatives align with the growing recognition of agriculture as a pivotal sector for economic development in Nigeria and across Africa. By enhancing access to insurance and promoting financial literacy, AIICO aims to empower farmers, increase productivity, and contribute to food security in the region.
