Gilbert Ekugbe
Heifer International, a nonprofit organisation on a mission to end global hunger and poverty, has introduced the Area Yield Index Insurance (AYII) to Nigerian rice farmers as a solution to mitigate climate change-induced losses and restore investors’ confidence in rice farming.
AYII is used globally to ensure farmers get full returns if insured farmland does not produce the projected quantity of crops.
It guarantees that farmers do not suffer loss, ensuring the sustainability of their agribusinesses and incomes.
The scheme is being implemented in Nigeria by Heifer International in collaboration with three other organisations; PULA, OLAM and Leadway Assurance Limited, to cover the hazard shared by most farmers in the country.
“Constant exposure to unreliable weather conditions, new pests and diseases, cripple farmers’ businesses and discouraged agribusiness financiers and investors, Area Yield Index Insurance provides rice farmers in Nigeria with an affordable way to mitigate the impacts of climate change on their businesses, ” said Rufus Idris, Country Director of Heifer Nigeria.
According to research carried out by PULA in some African countries, AYII has helped smallholder farmers in countries facing climate change risks to increase their resilience to shocks, increase investment in their farms by 16%, improve yields by 56% and increase household savings by up to 170%.
“Most smallholder farmers in Nigeria see insurance as a burden without any benefits. When farmers are interested, the cost can be prohibitive, as they have to pay for it at the beginning of the farming season, when their limit funds are needed for inputs and preparing the land.
“We believe insurance is an innovative financial solution that can increase the resilience of smallholder farmers in Nigeria. Designed by PULA and supported by Heifer International, the scheme will make farmers aware of the benefits of insurance and increase coverage, attracting more financiers to the sector to improve financial resilience for millions of farmers, ”said Idris.
“With climate change and adverse weather conditions playing a crucial role in negatively impacting farmer’s productivity and earnings, there’s never been a more critical time for AYII to create a soft-landing for farmers that need protection against nature’s uncertainty.
“We remain dedicated to creating innovative insurance products that de-risk farmers’ agricultural investments and keep them above the poverty line, while driving farming sustainability across Nigeria., ”said Chukwuma Kalu, PULA’s Commercial Manager- West Africa Anglophone.
Olam’s Vice President for Farming Initiatives, Reji George added, “Olam is committed to supporting the growth of smallholder farmers that we do business with; hence, we are happy to be a part of this innovative solution that improves financial resiliency among Nigerian smallholder rice farmers.”
