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Chuks Udo Okonta
To mitigate harvest losses suffered by farmers attributable to pest infestations, drought, prolonged dry spell, soil moisture stress, and other adverse climatic conditions attributable to the negative impact of climate change, Leadway Assurance, in partnership with global non-profit and leading Agri-tech businesses, indemnified about 3,110 smallholder rice farmers in Benue and Nasarawa States with over N100million claims payout.
Leadway Assurance, in collaboration with Heifer International, a global non-profit development; OLAM, a global agri-business company; and PULA Advisors, an Agricultural insurance and technology company had provided an innovative Agric-insurance cover – the Area Yield Index Insurance AYII, Pay At Harvest (AYII-PAH) initiative. This bespoke insurance solution which allows farmers to pay insurance premiums after their crops have been harvested and sold, was designed by Leadway Assurance and Pula Advisors to mitigate climate change-induced losses among smallholder farmers in Nigeria and further deepen insurance penetration among rural households in the Country. It was also designed to enable farmers pay for insurance premiums when it is financially convenient for them to do so. The cover compensate the farmers for yield losses suffered at the end of a cropping season.
The insurance premiums of the farmers was pre financed by Heifer International. The implication of this is that these small holder farmers who are usually constrained for cash to buy farm inputs at the beginning of the farming season have the option of paying for their insurance premiums at the end of the season, from the proceeds when the rice paddy have been harvested and sold or from the insurance claims paid by Leadway Assurance to the farmers that have suffered a loss during the season. Olam offtakes the harvested rice paddy from the farmers thereby guaranteeing a ready market for the harvested rice paddy. Either way it’s a win-win situation for the farmers.
Speaking during the claims payout ceremony in Makurdi, Benue State, on Thursday, June 9, 2022, Ayoola Fatona, Head, Agric and Micro Insurance, Leadway Assurance, said that compensating farmers for losses suffered during their production is pivotal to bolstering investors’ confidence in unlocking opportunities in the agricultural value chain towards engendering food security on the continent. It is also by extension Leadway Assurance contribution in guaranteeing the food security of the nation.
Fatona said, “In the 2021 farming season, we insured 4,358 hectares of farmlands belonging to over 4,354 farmers in Benue and Nasarawa States. Today, with the payment of the different claims amounts N100M directly to the farmer’s bank accounts, we have ensured that 3,110 of these smallholder farmers would not lose their investments over losses suffered due to soil moisture stress occasioned by prolonged dry spells and mild droughts. The farmers now truly believes that insurance truly works.
“With the payment of a claim totaling N111,398,895 (One hundred and eleven million, three hundred and ninety-eight thousand, eight hundred and ninety-five Naira), Leadway is enabling their recovery from investment losses and boosting their confidence ahead of a new farming season as the premiums received from the farmers at the end of the season will be ploughed back to insure their farms for the 2022 wet season which has begun in earnest with the onset of the rainy season in many parts of the country.
“As a leading risk bearer and insurance service provider with unrivalled integrity, recording a year-on-year industry claims payout record in the last six years, we have continuously shown our dedication and steadfastness to ensure peace of mind in every endeavour, especially for Nigeria’s agribusiness ecosystem. Irrespective of this daunting milestone, we are reiterating our commitment to supporting farmers in guaranteeing food security for the country.
“Today, indeed marks a major milestone in the Nigerian Agriculture Insurance space, as leading corporates in the agriculture space partners to provide support, restore investor’s confidence and boost farmers’ hope,” he added.
Leadway Assurance is one of Nigeria’s foremost insurance service companies with a reputation for service efficiency and customer reliability. The organization is committed to bridging the financial protection gap and increasing the insurance penetration rate in Nigeria.