THE PLACE OF THE NIGERIA AGRICULTURAL INSURANCE CORPORATE IN THE ECONOMIC TRANSFORMATION AND DEVELOPMENT OF NIGERIA

One of the cardinal programmes of the Obasanjo led administration when it came on board in 1999 was the radical development of agricultural in all its ramifications, not only as a veritable way of bringing about the all-round development of the Nigeria state, but also as propitious channel of systematically diversifying the mono-cultural tendencies of the Nigeria economy. And, one of the institutions through which this can achieved is the Nigerian Agricultural Insurance Scheme (NAIS) which was set-up to enhance and sustain food production in Nigeria. It was discovered that over the years, the concerted efforts to attain the laudable level in food production has been hindered by plethora of factors, especially inclement weather conditions and the effects of natural hazards like floods, drought, pests, disease, fire etc., to therefore address these problems which as more or less become a recurring decimal, the Nigerian Agricultural Insurance Scheme was put in place to provide protection to farmers from the effects of natural risks. Hence, the exigent need for a specialized Agricultural company to provide insurance cover to farmers was informed by government’s concern over the vacuum created due to the unwillingness of conventional insures to accept agricultural risks, which they considered too risky. The implementation of the scheme was thus initially vested in the Nigeria Agricultural Insurance company Limited, which later turned into a corporation in 1993 by enabling decree no. 37 of 1993. The categorical imperatives of the scheme were and are still to provide financial support to farmer, where losses to crops and livestock arise from natural hazards. It is to induce provision of credit by financial institutions, as the insurance cover is an added collateral. Again, it is to promote agricultural production by giving farmers confidence to accepted new as well as modern innovations and inputs. It is also to minimize or eliminate the need for government to provide assistance to framers during agricultural disasters.

For the very beginning, the scheme provide cover to only two crops items namely, maize and rice, two livestock items namely cattle and poultry and some commercial businesses like farm building, machinery and equipment. The cover has since been extended to cover more items namely; 21 crop items, nine items of livestock and 12 types of commercial business. And at the present; efforts are being intensified to increase the number of items under cover to include fisheries, perishable vegetables and more horticultural products. It has designed and implement special type of cover for agriculture or produce marketing loans as follows. Fire and special perils cover for property used as collateral security for marketing loans. Others are the burglary insurance cover for produce in storage; fire and special perils cover for produce, goods or other materials in storage, warehouses etc. Again, there are good in transit policy and cash in transit. Also, a special insurance package has been prepared for the beneficiaries of the Agricultural Insurance Scheme.