An innovative insurance package for small-holder farmers has been unveiled by Fertilizer Producers and Suppliers Association of Nigeria (FEPSAN) in collaboration with a pan-African agricultural insurance advisory firm, Pula, which will anchor the initiative, targeting about four million farmers in the country.
Stakeholders from across the fertiliser value chain at a one-day workshop on ‘Bundling Insurance with Fertiliser: A Way to Increase Fertiliser Sales to Small-holder Farmers’ in Abuja, opined that Area Yield Index Insurance (AYII) was the way to go in order to mitigate various risks being faced by smallholder farmers. According to the FEPSAN chairman, Thomas Etuh, he said the Area Yield Index Insurance can be a lever for helping farmers cope with weather and other peculiar risks while scaling adoption of fertilisers among small-scale farmers.
“We believe that through adding insurance, we will kill two birds with one stone – improve our farmers’ resilience and grow adoption of fertilizer in Nigeria,” Etuh added.
For her part, the chief executive officer of Pula Insurance, Rose Goslinga, said the insurance policy will be subscribed to automatically by farmers through the purchase of fertiliser products for their farms.
She highlighted that while Area Yield Index Insurance will first and foremost benefit farmers, it will also be beneficial to the participating fertiliser companies as the initiative will create an opportunity for them to build strong brands among farmers and gain new customers.
“Embedding agriculture insurance to Fertilizer will enable these companies to understand farmers better while providing them with real protection. In the 10 countries that Pula works, we have seen that companies adding insurance can grow their customers base by 30% in one year,” Goslinga said.
LEADERSHIP reports that the potential partnership, which would bundle insurance with up to 14 million bags of fertiliser, could see as many as 3.9 million farmers benefiting from climate insurance in 2020 and up to 19 million by 2025.
Farmers across Nigeria currently face a range of risks such as climate induced drought, excessive rainfall, pests and diseases, among other challenges that undermine their hope of bountiful harvest and income from their toils. According to a communique issued at the end of the workshop, stakeholders including Alliance for Green Revolution in Africa (AGRA) said Pula’s proposed Area Yield Index Insurance solution, which would compensate farmers in the event of climate or other catastrophes, is an important intervention that will help farmers manage risks and build sustainable farming enterprises that can withstand shocks.
“This insurance also provides financial security that gives farmers confidence to invest in additional inputs like fertilizer, knowing that their investment will be protected by insurance in the event of crop failure,” the communique added.