The Federal Government through the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending has developed an insurance scheme designed to protect farmers from losses during the planting season.
It said the insurance product, which was designed in collaboration with Royal Exchange General Insurance Company, would protect farmers from losses caused by bad weather, such as low and high rainfall.
Others include early and late season dry spells, lightning, hailstorms and thunderstorms, pest outbreak, disease outbreak, fire outbreak and permanent disability or death of the farmer.
NIRSAL’s Managing Director, Aliyu Abdulhameed, said on Sunday in Abuja that the Hybrid Multi-Peril Crop Indemnity-Index Insurance, also called HM-II, would have significant impact on agricultural productivity and assured income for farmers.
Abdulhameed said a key advantage of the HM-II was that in cases where the highlighted risks happen, benefits paid out to the farmer would be up to the maximum loan or the insured amount.
This, he said, would be after confirmation by advanced satellite technology, an assessment by an agriculture expert, or both.
According to him, the development of HM-II was in accordance with NIRSAL’s mandate to de-risk agriculture and facilitate the flow of finance to the sector.
He said this aligned with the organisation’s target of increasing distribution of existing and new agric insurance products to 3.6 million farmers nationwide by 2026.
Abdulhameed stated that NIRSAL Plc had already reached a milestone of 1,476,289 smallholder farmers.
He said the HM-II was another step towards the development of the NIRSAL Comprehensive Index Insurance conceptualised in 2018.
Abdulhameed said, “Towards achieving the NCII, the inauguration of the HM-II marks an improvement to the NIRSAL Area Yield Index Insurance which the corporation developed in 2017 and piloted in the wet season farming of the same year, covering 17,000 farmers and 10,000 hectares with a harvest value of N3bn.”
The Managing Director, Royal Exchange, Benjamin Agili, described HM-II as a product that protects the smallholders from losses including disability during a particular farming season.
This, he said, guaranteed sustainability, continuity and would ensure that the farmer remained in business no matter the loss or situation.
On his part, NAICOM’s Commissioner for Insurance, Sunday Thomas, who was represented by the commission’s Director of Policy and Regulation, Leonard Akah, said NAICOM was eager to lend its support to the development of a product such as HM-II.