Source: The Guardian Nigerian News
AIICO Insurance Plc has called for a concerted effort among stakeholders to revitalize Nigeria’s agricultural sector, emphasizing the pivotal role of insurance in bolstering sustainability and profitability. Mr. Leonard Okereafor, 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 address, Okereafor highlighted multiple benefits agricultural insurance offers to farmers, such as income stability, easier access to financing, support for strategic partnerships, peace of mind, and effective risk management. “We must cultivate a workforce that is equipped with modern skills, values, and attitudes to boost productivity and achieve food security. Agribusiness is one of the main drivers of this transformation,” he stated.
Okereafor distinguished between agriculture and agribusiness, explaining that while agriculture focuses on land cultivation and livestock rearing, agribusiness encompasses the entire agricultural value chain—ranging from input supply, farming operations, and processing to distribution and marketing. He underscored that whereas agriculture primarily concerns food production, agribusiness centers on profitability and market competitiveness, demonstrating its potential to spur economic growth.
To substantiate his points, Okereafor outlined the agribusiness value chain, which includes input supply, production, post-harvest services, processing, trading, and retail. He identified several hurdles facing agribusiness development in Nigeria, such as limited access to modern farming technology, insufficient extension services, weak market linkages, and inadequate financial solutions. “These barriers must be addressed to unlock Nigeria’s agricultural potential and develop a vibrant agribusiness ecosystem,” he emphasized.
AIICO offers a variety of agricultural insurance products tailored to meet the unique needs of Nigerian farmers and agribusiness investors. Okereafor described two primary categories of insurance: Indemnity and Index-based insurance. Under Indemnity insurance, AIICO provides coverage in several areas:
- Poultry Insurance: Covers losses due to the death of poultry, including broilers, layers, and hatchery stock, from risks like fire, lightning, flooding, disease, and accidents.
- Fishery Insurance: Insures fish and fish ponds against death and structural collapse caused by environmental hazards.
- Livestock Insurance: Protects cattle, sheep, goats, and other livestock from death due to fire, floods, accidents, and disease.
- Plantation Insurance: Covers crops like cocoa and oil palm against damage from fire, flooding, and other environmental threats.
- Farm Property Insurance: Protects farm assets, including warehouses and equipment, from loss or damage due to a range of risks.
- Multi-Perils Crop Insurance (MPCI): Provides coverage for crops against losses from fire, flooding, pests, diseases, and other hazards, covering production costs for crops affected during the growth cycle.
Okereafor stressed that insurance is vital for managing agricultural risks, pointing out that the unpredictability of climate and market conditions makes insurance essential for the stability and growth of agribusiness. He noted, “Farmers and agribusiness owners need to see insurance not merely as a cost but as an investment in the resilience and future profitability of their businesses.”
Amid challenges such as climate change and economic instability, AIICO Insurance is committed to assisting farmers and agribusinesses with specialized insurance solutions tailored to their needs. Okereafor concluded by encouraging stakeholders to engage in dialogue and cooperation to strengthen Nigeria’s agricultural insurance framework, ensuring farmers have access to the financial tools needed for success.
In a broader context, AIICO’s initiatives reflect the increasing recognition of agriculture as a crucial sector for economic growth in Nigeria and Africa. Through enhanced insurance access and financial literacy promotion, AIICO aims to empower farmers, boost productivity, and support regional food security.
