Utilise FG’s NISRAL, NAIC Policies AFAN Urges Farmers

Gilbert Ekugbe

The Women Leader, All Farmers Association of Nigeria (AFAN) and Director-General/ National Coordinator, LUGAVO, Hajia Halima Njobdi has urged farmers to take advantage of the federal government’s Nigeria Incentive-Based Risk Sharing System for Agricultural Lending and the Nigerian Agricultural Insurance Corporation (NAIC) to safeguard risks exposures of their farming businesses post COVID-19.

She added that with the adverse impacts of the COVID-19 pandemic and worsening security challenges in Nigeria’s agric sector, Nigerian farmers have been advised to key into the insurance guarantee and subsidy regimes in agro-industrial value chains introduced by the Central Bank of Nigeria (CBN)
Halima stated this at the 2021 farming season sensitization programme for local farmers mostly women and youths in Abuja, recently.

She noted that this was a tough period for every farmer and the country in general following the ongoing insecurity and COVID-19 impacts.

According to her, there is need to turn to CBN platforms especially insurance guarantee and subsidy regimes in agro-industrial value chains to realise Returns of Investment (ROI) in agric farming.

The AFAN women leader told the local farmers that NIRSAL guarantees loans facilitated by the CBN through commercial banks for agro-industrial businesses, especially in the Anchor Borrowers’ Programme.

She added that NAIC also offers a 50-per cent subsidy on food crops but the subsidy does not apply to cash crops such as cashew, cocoa and palm oil insurance.

Njobdi, however, called on farmers’ associations, the government at all levels and non-governmental organisations to mobilise farmers to see insurance coverage as a necessary part of their businesses to ensure stability and sustainable food production.

Speaking at the event, the representative of the Managing Director of NAIC, Mrs Folashade Joseph, said that NAIC runs a subsidy regime on insured crops such as “rice, maize, yam, cassava, sorghum, guinea corn, beans, soya beans and indeed, all food crops.

“Subsidised livestock include poultry, cattle, goats and sheep, rabbits and fishery, among others. Dogs, camels, donkeys and horses are on commercial basis,” she said.

Also speaking, the Managing Director/CEO, NIRSAL Plc, Abdulhameed Aliyu, disclosed that the agency’s guarantee cover on bank loans ranges from 30 to 75 per cent.

According to him, this implies that after all due diligence, if an agricultural loans becomes bad, noting that NIRSAL would refund the facilities up to the tune of 75 per cent, assuring commercial and micro-finance banks participating in the agricultural loan schemes of the Federal Government through the CBN.

Aliyu added that over the years, the risk management institution had facilitated the flow of more than N150 billion into agriculture from multiple sources.

“At least, N124 billion of that sum came from commercial banks who leveraged NIRSAL’s Credit Risk Guarantee (CRG) facility in addition to investing in de-risked, structured, and well-monitored projects to make high investment returns.

“While NIRSAL Plc relies on the high level of control afforded it by its innovative value chain solutions as a safeguard for its risk exposure, the banks rely on same, in addition to the CRG facility for the safety of their financial investments,” he had said in a statement.

He added: “We are happy to yet again demonstrate our willingness and capability to support agro-allied companies across the country to grow their businesses, engage smallholder farmers, and earn foreign exchange for the Nigerian economy.”

Also speaking at the event, the managing director of Dano Farms Limited, Obalola Adeoye explained that in a bid to minimise apathy of farmers over agricultural insurance and boost credit facilities for food production and agro-industrial development, several efforts have been made to deepen participation.

Adeoye pointed out that credit facilities and insurance coverage are Siamese twins often demanded together, but most Nigerian farmers have reservations over insurance and explore alternatives to insurance.

According to him, such alternatives include cooperative thrifts, government intervention after disasters and others.

Also, without financial resources, farm operations are limited to subsistence form, which breeds poverty among farmers and cyclic food shortage to the country. “Fixing lack of enthusiasm for insurance among farmers as one of the major obstacles to agricultural credit facilities was the aim of the Central Bank of Nigeria (CBN) when it established NIRSAL Plc,” he said.

In his own speech, an agricultural insurance specialist with Leadway Assurance, Mr Ayo Fatona, said that insurance specialists have been encouraging farmers and agro-investors to embrace insurance through NIRSAL and NAIC windows of guarantee and subsidy on premiums payables respectively is desirable.

Fatona said a 50-per cent subsidy is not only encouraging but also attractive, and large-scale crop farmers should take advantage of the scheme.

“The CBN-NIRSAL guarantee of agricultural loans, he added, is one of the best incentives to deepen insurance in agriculture and ensure food security as the population increases rapidly and economy downturn escalates.”