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States in arrears of subsidy to NAIC

By Favour Nnabugwu

Some states government are indebted to the Nigerian Agricultural Insurance Corporation (NAIC) in paying subsidy to the company. NAIC is currently the only insurance company that government subsidized it agricultural insurance for the country’s crop and livestock farmers.

The Deputy General Manager, Business Development at the NAIC, Mr Bashiru Martins, lamented at the media retreat organised by the Insurance Industry Consultative Council for Insurance correspondents, in Abeokuta, Ogun State penultimate Wednesday.

Though he did mention the amount of subsidy owed or the number of states indebted to the company while he wished that the government to make its agric Insurance subsidy effective through regular subsidy payments. Martins said the demands have become necessary because of the importance of agriculture in national economic development of Nigeria and the fact that agric business by its nature is a very risky business.

Some of the risks associated with agriculture as floods as witnessed in different parts of the country now on yearly basis, vagaries in weather conditions, fire disasters, communal clashes, market failure, price changes, unsteady rainfall pattern, policy changes, land losses as well as pest and diseases.

He said insurance itself is a risk management tool while risk by its nature has to do with uncertainties arguing therefore that insurance is needed most by farmers to preserve their produce and reman in business

Being a government owned insurance company, it is enjoying government subsidy, which enables it support small holder famers across the country. But analysts say that liberalising the sector will encourage other players that have requisite skills for agric insurance to invest and expand to the grassroots, where most farmers are concentrated.

Although the government had in the years past contributed  its quota in this regard by bearing part of farmers’ insurance cost  through subsidised agric insurance scheme, which was provided by the Nigerian Agricultural Insurance Corporation (NAIC), insurance experts and economists said  there is need for government to take further steps in subsidising agric insurance premium for covers provided by commercial insurers.

According to him, “The government can do better to encourage Nigerians to take insurance when they face risk than giving them intervention funds as it is currently doing.” He warned that disaster does not discriminate; therefore Nigerians of all classes should embrace insurance especially agric insurance irrespective of size of their farms.

Martins said, The corporation has been carrying out sensitisation programmes among farmers in different parts of the country , in zones, sates and farm settlements and has been spending a lot of resources on that as well as on development of suitable products for farmers.”

He said the corporation is currently working on some strategic business initiatives such as new insurance software to facilitate its operational processes (improve turnaround time),fund committed to research and development of new products as well as distribution models.

Martins also said NAIC is working on a process of conceptualising and designing a template for communication strategy and is currently discussing with reinsurers of international repute for a robust and adequate programmes for portfolio risks, especially for the new emerging agric challenges and opportunities.

 


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