How lack of insurance is crippling Kano farmers

Farmers in Kano State are lamenting over incessant natural disasters that are taking away their produce every year, leaving them with nothing to rely on for livelihood. They also lamented that there were no serious measures taken to avert the occurrences; thereby leaving them worried about how they could recover their capital and invest again.

It was gathered that many farmers, including poultry owners, have been phased out of the system, thereby turning them to labourers, as they cannot afford to invest on their farms.

Some of them rely on the government every year to provide them with either free or subsidised farm inputs, which they say is affecting their production due to delay and other reasons.

Majority of the disasters experienced by farmers in Nigeria are flood, fire, windstorm, drought, moisture stress, excessive moisture, climate change, heat, diseases, pests and wild animal encroachment. Social risks include burglary/theft, strike/riot, war/terrorism, vandalism, moral hazards, socio-cultural risks, financial/market, price fluctuations, depreciation, loss of income, interest changes and exchange rate.

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Meanwhile, the need for a specialised agricultural insurance company to provide insurance to farmers was informed by the government’s concern over the vacuum created due to the unwillingness of conventional insurers to accept agricultural risks, which they consider too risky. This led to the establishment of the Nigerian Agricultural Insurance Scheme on November 15, 1987.

The implementation of the scheme was initially vested in the Nigerian Agricultural Insurance Company Limited, which was later incorporated in June, 1988, but later turned into a corporation in 1993 by Act 37 of 1993.

The Nigerian Agricultural Insurance Corporation (NAIC) is, therefore, a wholly-owned Federal Government of Nigeria insurance company set up specifically to provide agricultural risks insurance to Nigerian farmers; to protect them from the effects of natural hazards by introducing measures which shall insure indemnity sufficient to keep them in business.

However, as at 2020, the NAIC insured less than two per cent of the farmers in Nigeria after almost three decades of its operations.

Therefore, there remains a huge insurance market for the balance of about 98 per cent uninsured.

NAIC explained that the NAIC Act Cap N89, Laws of the Federation of Nigeria empowered it to underwrite agricultural risks and subsidise the premium chargeable on some categories of crop and livestock items by as much as 50 per cent.

However, despite all the interventions and calls for farmers to insure their farms, they are yet to do so, and the majority of them are not even aware of the system.

Speaking to Daily Trust on Sunday, the majority of them said they watched as disasters were taking away their produce, noting that they were after saving their lives, as the disasters did not allow them to remove their produce.

While many of the farmers said they were not aware of the insurance scheme, some said it was against their norms and religion in Kano.

They also said that the majority of them didn’t have enough capital to invest on their farms, talk less of investing in insurance.

A farmer in Kura LGA, Ayuba Manya, said he had been in the farming system for over four decades but that he had never heard of NAIC.

He said, “I don’t even know about it. We do experience disasters for many years, but all we do is accept them as destiny. We wait for the next season, if we have money we invest and if we don’t we wait for the government to give us inputs or we collect loans.”

Manya further said that even though he was not used to the system and had lost a lot on his farm, he might not likely subscribe to it as it involved giving money for something which most times doesn’t happen.

He said, “Here in the village, we have a lot of responsibilities on our shoulders. We have to do them with the little we have. I don’t think I can do it. What about if nothing happens to my farm? Honestly they should do something better.”

Another famer, Alhaji Umar Ahmad Bunkure, said for the past years they had seen a lot of corruption in farming with regards to inputs sharing, which he noted, “Is the reason behind many failures in the sector. Farmers no longer trust the people handling many of their issues and hence cannot trust the insurance scheme.

“Although there is the religious inclination, there are ways in which farmers can be encouraged to join. There is a lot ongoing in the farming system. From sharing of inputs to distribution of relief materials when there is disaster. So, farmers are saying when they cannot do justice on this, how would they trust them with the insurance? There is a lot that needs to be done for the farmers to accept the system.”

A poultry farm owner, Kabiru Sani, said he had been in the business for over 20 years but that he hadn’t insured his farm yet even though he was aware of the system.

He explained that in the North, there were many factors that prevented people from engaging in insurance schemes, among which were religion and lack of awareness.

He said, “I am aware of insurance schemes, but honestly I don’t have any. To some extent it is against our religion. That is why many of us are not doing it.

“We are losing a lot every year, but we have no option than to accept destiny. Even now I don’t have birds in my farm because of a disaster. Last year I lost over 2,000 birds that were laying eggs. Yet I didn’t invest because I don’t have the capital. I have few animals there now.”

Religion, uncertainty among top factors – AFAN

Speaking to Daily Trust on Sunday on the reasons behind the farmers refusing to insure their farms, the Kano State Chairman of the All Farmers Association of Nigeria (AFAN), Abdulrashid Magaji Rimingado, said there were three reasons that prevented them, but that they were doing their best to encourage the farmers into the system.

He said, “The first is lack of awareness, which is inclined with religious barriers. Many people believe that Islam doesn’t allow for insurance. Second reason is economic issues. The farmers are battling with the cost of inputs; they will not have enough to pay for the scheme. Majority of them are after what they will eat. Last reason is the farmers have no certainty of whether they will be indemnified if a disaster occurs.”

He further said that there were recently introduced systems that might likely encourage the famers to enroll into the insurance scheme.

He noted that, “Through the loan of inputs given to the farmers, they are introduced into the system.

“Also, with the recent Yields Insurance, which is measured par yield, if you are expecting five tonnes in your farm, and you get four, then you will be paid the one tonne you lost. This is also a good system that will encourage farmers into the system.”