Agriculture is the lifeblood of Nigeria’s economy. Forget hydrocarbons; that one is for the money men. More than 60% of working Nigerians are employed in agriculture. Unfortunately, the agricultural practice in the land is heavily subsistence in nature with practically no productivity gain in years. The implication is a great stasis requiring government to feed farmers. Yes, you read that well: government needs to send food to farmers to prevent severe hunger.
But change is coming, and we are seeing a fundamental reboot in the sector. Government is working now to fix one of the root causes of the agricultural paralysis: limited agro-insurance. According to Punch, Nigeria plans to increase agro-insurance from the paltry current 500,000 farmers to 3.8 million farmers (too bad the reporting did not give timeline). Sure, the new target is still small, but that is progress.
The Federal Government is planning to increase insurance coverage for the agricultural sector from the current 500,000 farmers to 3.8 million farmers.
The Managing Director, Nigeria Incentive-Based Risk Sharing System for Agricultural Lending, Mr. Aliyu Abdulhameed,while speaking at a forum in Abuja, noted that the move would help increase the level of output for the sector.
To achieve this, he said NIRSAL had commenced discussions with Royal Exchange Assurance, Nigeria Meteorological Agency among others for the development of a technology-driven Hybrid Index Insurance product.
Most private insurance companies have not paid attention to agro-insurance because the process is extremely challenging because of the small sizes of our farms. Yes, when you put men and women on suits to administer such programs, finding profitability becomes challenging. The only strategy for decades was to ignore agro-insurance in Nigeria, leaving it mainly to NAIC (Nigerian Agricultural Insurance Corporation), the government agro-insurer. Of course, even NAIC does not have scale to do much.
So, we have remained where we are, focusing on mobile apps innovation when the most important innovation in agriculture remains elusive to farmers for decades. But modern technology is changing that. Yes, you can administer the programs and still find value even for small farms. If the government can unlock insurance, a catalytic element of modern commerce, it would reboot Nigeria by making farming a business.
We need that glory because if we can fix agriculture, we would fix poverty. And if we fix poverty, our democracy would be magically strengthened.---
1. Advance your career with Tekedia Mini-MBA (Sept 13 – Dec 6, 2021): 140 global faculty, online, self-paced, $140 (or N50,000 naira). Click and register here.
2. Click to join Tekedia Capital Syndicate and own a piece of Africa’s finest startups with a minimum of $10,000 investment.