Need to De-risk Nigeria’s Climate-threatened Farmlands

With many Nigerian farmers still smarting from the ruination of farm produce by the recent flooding, Festus Akanbi writes that de-risking farming for farmers could support them to scale up production and increase their resilience to ever-increasing climate shocks

Today, Nigeria’s farmers as well as its rapidly growing population face a food-insecure future after 140,000 hectares of farmland in 34 of the country’s 36 states were devastated by floods and heavier-than-expected rainfall in recent weeks.

The development has elicited the fear that the extent of the damage to farmland and crops may reduce access to food and diminish the quality of food across the nation, intensifying food insecurity, hunger, and entrenched poverty.

Industry analysts believed that uninsured and underinsured smallholders make up most – about 90 per cent – of the farmers in Nigeria and account for the majority (80 per cent) of local agricultural production.

 De-risking farming for farmers could support them to scale up production and increase their resilience to ever-increasing climate shocks.

It is in this respect that Heifer International, a global nonprofit working to eradicate poverty and hunger comes into the picture. The organisation is committed to sustainably addressing the shortfall in crop insurance while supporting farmers with training on climate-smart agriculture interventions and access to technology so that they are better prepared to deal with climate events – like flooding.

 “Building resilience will require a combination of interventions and more partnerships at all levels with governments, the private sector, and major international foundations as well as development institutions to de-risk farming in Nigeria,” said Adesuwa Ifedi, Senior Vice President of Africa Programmes for Heifer International.

“We need to promote climate-smart innovations in agriculture, by working with farmers, their communities, and market system actors to prepare for climate shocks and identify and invest in opportunities that deliver positive outcomes for farmers,” she said, adding that “Smallholder farmers will be better supported if emerging technologies are leveraged to protect agricultural investments across Africa.”

However, this kind of programme is uncommon in Africa and the adoption of crop insurance programs has been weak because farmers have not been able to afford insurance premiums. In comparison, the United States crop insurance program covers more than 80 per cent of American cropland and costs the government an average of nearly $9 billion per year.

Heifer International Country Director for Nigeria, Rufus Idris, acknowledges the challenges and notes that rural communities lack the financial resources as well as the access to innovation and technology that could build resilience and better prepare them for shocks.

In 2021, through a collaboration with Pula Advisors, Olam Agri, Thrive Agric, and Leadway Assurance Limited, Heifer International introduced the Pay-at-Harvest (PAH) Area Yield Index Insurance (AYII) to rice farmers as a means of reducing their risk of crop loss from climate-related events while also restoring investors’ confidence in rice farming. The PAH model of insurance specifically addresses farmers’ inability to pay premiums early in the season. Farmers have insurance coverage at the start of a season but pay the premium after they have harvested and sold their produce. Farmers that experience covered crop losses through floods, droughts, new pests, and diseases can recover their investment.

“With farming in Nigeria considered high risk and liable to losses, Heifer International is collaborating with its partners to help smallholder farmers in Nigeria adapt to climate change and maximise their outputs,” said Idris.

“This programme provides rice farmers in Nigeria with an affordable way to continue farming. Farmers get a full return if their insured farmland does not produce the projected quantity of crops due to a climate event,” he said.

At present, nearly 20 thousand smallholder rice farmers, (4,159 were affected by the flood) are participating in the AYII project for the 2022 Wet Farming Season. This number is expected to grow to at least 100,000 farmers by June 2025.

 According to the World Bank, climate change inaction could cost Nigeria between 2-11 per cent of GDP by 2020 and 6-30 per cent of GDP by 2050, equivalent to a loss of US$100-460 billion.

Results from a study conducted by Pula show that the AYII insurance programme has helped smallholder farmers increase farm investment by nearly 20 per cent; double yields and increase household savings by as much as 170 per cent, resulting in an overall increase in the resilience of participant farmers.

While many parts of Nigeria are prone to annual floods, the extent of flood damage has become more severe in recent years. In some areas, homes and neighbourhoods have been completely submerged by floodwaters.  Nigeria’s meteorological agency has warned that the flooding could continue until the end of November in some states in the south of the country. The agency has urged local governments to “prepare accordingly.”

A rice farmer in the flood-ravaged Awe Local Government Area of Nasarawa State, Safiyanu Suleiman, said thousands of farmers have lost their farms to flooding in the area.

“In the Azara community where I come from, we are heavily dependent on farming for income. Most of our farms were submerged by the flood and only those of us who insured our farmlands through the Heifer International program are certain of a way out of this situation,” the 37-year-old farmer said.

The situation is similar for a 32-year-old resident of the Daudu community in the Guma Local Government Area of Benue State, Felicia Gbuuka. She had cultivated three hectares of rice farm during the farming season and more than two of those hectares were affected by the devastating floods. 

 “I may not have been able to recover from the effect of this loss if I did not protect my rice farm through insurance, Gbuuka explained. “What I thought was not necessary has turned out to become my saving grace,” she said.

Another rice farmer, Esther Ogochukwu Ezeh, 31, who also lives in the Azara community of Awe Local Government Area of Nasarawa State, regrets not having a risk mitigation plan to protect the investments in her rice farm. The mother of three said the flood has cut her off from her primary source of livelihood. “My farm is completely flooded,” she exclaimed.

“The money I spent on cultivation has gone to complete waste. I can’t lie, I wish I joined the farmers who insured their farmlands. I hope I get another opportunity to participate in the insurance scheme,” Ezeh said.

Vice President for Farming Initiatives at Olam Agri, Reji George, an agribusiness enterprise that has established Africa’s largest commercial rice farm at Rukubi in Nasarawa State, said insurance provides a path forward for farmers and allows them to overcome climate and weather-related challenges they may not otherwise be able to overcome.

“Olam has been negatively impacted by the devastating floods in its own 4,500 Hectares of Nucleus Rice farm in Nasarawa State and also across its massive out-grower programs in the states of Nasarawa, Benue, Taraba, Plateau, Niger and Kogi,” he said, adding that,  “The Area Yield Index Insurance has come to the rescue of these farmers.”

Pula has been widely recognised for its work piloting crop insurance throughout Africa. 

“With 140,000 hectares of farmland now under water following recent flooding across the country, the 19,900 hectares of farmland, belonging to the 19,900 Naija Unlock smallholder farmers participating in the Heifer supported pay-at-harvest AYII, are insured to the tune of N5.9 billion ($13.6 million), hence, these Naija Unlock farmers are more resilient to the effect of the recent devastating flood in Nigeria,” said Chukwuma Kalu, Pula’s Commercial Manager- West Africa Anglophone.

The programme is being implemented under Heifer’s Signature Program “Naija Unlock”, which aims to unlock Nigeria’s potential for food self-sufficiency and enable one million people to reach a Sustainable Living Income by 2025 by strengthening local market systems and promoting innovative agribusiness models in the rice, tomato, poultry, small ruminants, and cattle value chains.

During the 2021 Wet Farming Season, a total of 4,358 hectares of farmland belonging to 4,354 smallholder rice farmers in Benue and Nasarawa states were insured under the project. Just over three thousand smallholder rice farmers suffered crop losses.

Leadway Assurance, an implementing partner for AYII acknowledges that encouraging farmers’ resilience to climate-induced losses has far-reaching economic benefits.

“The affected rice farmers received a total of N111,398,895 ($253,012.55) in insurance compensation,” said Mr. Ayoola Fatona Head of Agric and Micro Insurance for Leadway Assurance Limited.

 Heifer International is also partnering with Ignitia, a technology company that builds smallholder farmers’ resilience through digital weather information and analysis. The company aims to connect 780,000 smallholder farmers to a platform that will allow them to receive daily weather forecasts and weekly climate smart extension advisory messages by 2025 to improve outcomes and increase both yields and profits.

Since 1944, Heifer International has worked with more than 42.9 million people around the world to end hunger and poverty sustainably.

Working with rural communities in 19 countries in Africa, Asia, and the Americas, including the United States, Heifer International supports farmers and local food producers to strengthen local economies and build secure livelihoods that provide a living income.