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By Henry Uche [email protected]
Even as every sector of the economy strives to remain viable even in the midst of global socio-economic crises, one indispensable industryfor the survival of mankind is the agriculture. As critical as it is to the development of the country and crucial to the achievement of the Sustainable Development Goals (SDGs), which seek to eradicate extreme poverty and hunger by 2030, it’s however thrust with myriads of risks and hazards in its entire value chain. Production risk for instance is ubiquitous in agriculture, yet farmers across the developing world like Nigeria are devoid of access to quality agricultural insurance coverage due to limited data knowledge about farmers’ insurance needs and high costs of insurance for highly severe agricultural risks among other factors.
The Russia – Ukraine war has taught the world some lessons particularly in management of scarce resources and the need to back up every Life or capital venture with commensurate insurance cover. In a paper presentation titled, “Assessing Agricultural Insurance as an instrument for Sustainable Food Supply System In Nigeria, by Dr. Sunday Stephen Ajemunigbohun, of Lagos State University (LASU), he said “Promoting agricultural insurance, as an instrument, could help to add value to stabilising farmers’ income by reducing poverty (SDG 1), ensuring a climate safety cover for food producers (SDG 13), and creating more welfare packages to address hunger (SDG 2).
According to him, the agonies of Nigeria farmers as well as the thought, the experience and observations and challenges of agricultural underwriters in Nigeria are better imagined than experienced. He recall that agricultural production tripled between the years 1960 and 2015, due to the adoption of green revolution technologies coupled with significant expansion in the use of water, land, and other natural resources for agricultural uses. However his studies revealed that the continued and widespread food deficiency and malnutrition has remain a major challenge in many areas of the globe. More so, further studies revealed that the developmental stride put forward to eradicate hunger and food deficiency by economic managers will not be sufficient even by the year 2050 if adequate efforts are not in place to mitigate the risks and hazards involved in agricultural practices.
Since agriculture is one of the path ways to prosperity, it’s unarguable that no region of the world has developed into a diverse modern economy without first establishing a successful foundation in agriculture with adequate provisions for insurance cover.
Since Nigeria’s return of civil rule in 1999, successive governments have been heralding the course of diversifying the economy away from oil to agriculture and other sectors. To meet this goal, various government programmes to support rice farmers, and other categories of farmers had been put in place. This agricultural drive is in tandem with successive government efforts at achieving sustainable food security and self-sufficiency in food production.
All of these had been directed at reawakening the past landmark achievement recorded over the years in the agricultural sector which is regarded as the mainstay of the economy, but to what extent had insurance coverage been put in place by any responsible government to guard farmers against natural disasters like floods and pestilence, or human activities which shatters the produce and income of farmers, since agriculture is seriously prone to risks and hazards.
Nigeria is a vast agricultural country endowed with substantial natural resources which employs about 60% of the working age in agricultural sector but this number has crashed drastically because most farmers are uncertain if agricultural insurance exist nor have access to one, since the profession is often bartered with unprecedented risks. The hazards faced by farmers at every stage of their value chain have led to over 60 million (30 per cent of 200 million Nigerians) undernourished and malnourished due to food insecurity and lack of access to food.
“Given the current economic situation in Nigeria coupled with hyperinflation and its attendant hunger in the land, the government over the years have putting effort into revamping the agricultural sector with the desire to not only boost the sector but restore the lost glory of Nigeria in self-sufficiency in food production and supply. These efforts were geared toward encouraging more people into agricultural (either as an investor or a farmer) to reduce the alarming rate of unemployment and enhance the economic diversification policy of the federal government. This desire had made it imperative that proven scientific and appropriate economic means for managing the various risks that are associated with agricultural endeavours are brought to the fore,” Ajemunigbohun said.
Since food crisis could be caused by the act of nature or by the careless act of man towards agriculture, seeing men and women go hungry in the midst of abundant natural resources (including human capital) should be guided against, hence the need for the government across board and insurers to come to the aid of farmers.
Thus, the role of agricultural insurance in realising these government objectives and protecting farmers against possible agricultural risks is inescapable. Agricultural risk is a central theme in farming globally due to the threats of pests and diseases, other natural disasters, bush fires, herders’ activities, drought, and price fluctuations. In Nigeria, farmers have been disturbed by the activities of herders, bandits, kidnappers, and political unrest, Boko Haram among others risks factors. But a great majority of them (farmers) due to insufficient means and resources, are rarely able to withstand the risks, especially when it involves disastrous losses. The result, often, is a serious decline in farm income/ productivity and the consequent failure of the sector.
Insofar as farmers need new ideas and information on agricultural insurance and risk management, the need to analyse the extent to which agricultural insurance has been helpful to protect and upscale the activities of farmers in Nigeria through the instrumentality of government and private insurers in Nigeria is of utmost importance.
How to get agricultural insurance to better the lots of farmers and sustain food supply systems in Nigeria must be communicated to every stakeholder in the agricultural value chain. Does Nigeria has enough agricultural underwriters, does farmers know and understand them? Does the government across board offer incentives for agricultural insurance? These and more shall be explored subsequently.
