The Nigeria Incentive-Based Risk Sharing System for Agricultural Lending has provided insurance cover worth N6.5bn to protect farmers in the country.
The Managing Director/ Chief Executive Officer, NIRSAL, Mr Aliyu Abdulhameed, disclosed this in a presentation on ‘Unlocking productivity and investment opportunities across the agribusiness value chain’ during Ecobank Agribusiness Summit in Lagos.
He said NIRSAL developed and launched the Area Yield Index Insurance product and protected up to N6.5bn revenues of over 37,399 farmers, with over N121m paid out as compensation.
NIRSAL works with a consortium of local and international insurance operators to develop innovative insurance products to move Nigerian agricultural insurance from indemnity-based to index-based insurance.
According to NIRSAL, the Area Yield Index Insurance covered the smallholder farmers on expected yield based on the historical yield performance in the agro-ecological zone and protects farmers’ revenues from losses due to pests, diseases, adverse weather conditions and other disasters.
According to the National Insurance Commission, 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.
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 Bano 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.
A technical adviser worked with both NIRSAL and the consortium of insurance companies to grant Group Yield Crop Insurance cover under the scheme, and the collaboration was successful in maize, rice and sorghum production.