NIGERIA: e-Wallet: NAIC Commences Training of Farmers

JULY 23,2014.


The Managing Director of the Nigerian Agricultural Insurance Corporation (NAIC), Mr. Bode Opadokun said the corporation has commenced sensitisation of farmers in preparation for the take off of the “e-Wallet”, a platform on which the Federal Government hopes to provide professional risks mitigation services to small farmers across the country.

He said the corporation was set to test-run the programme in two states to identify pitfalls and areas where the strategy needed to be fine-tuned before extended it to farmers across the federation.

Speaking to THISDAY in Abuja recently, Opadokun confirmed that the premium for the cover has been pegged at N300 for every bag of fertiliser a farmer buys from government up to a maximum of two bags.

“We have commenced the sensitisation for farmers.  We really believe it is something that is possible but we are not reaching out to the entire federation in the mean time.  We want to test it in two states to see if there is any area that we still need to patch it up before we launch it across the federation.

“Initially we were looking at N500 per bag but after several discussions, we did the cost analysis and eventually agreed with the Federal Ministry of Agriculture to peg it at N300.  What that means is that a farmer is paying N300 for a sum assured of N20,000 and if he buys 2 bags, the premium will be N600 for a sum insured of N40,000, maximum” Opadokun explained.

The NAIC boss rationalised the programme saying it was designed to ensure that the objectives for setting up NAIC, which include encouraging farming and enhancing food production, is realised.

“We identified on assumption of office that there has not been enough of what is expected from the administration especially when you look at the primary objectives for setting up the corporation.

“The areas that readily comes to mind which really informed these new channels of distribution is the section of the laws that said NAIC is to minimise, if not eliminate the involvement of government in the provision of financial reliefs at the time of any form of eventuality occurring to farmers,” he said.

In 2012 serious flood affected about 139,000 farmers nationwide and majority of them do not have any form of insurance.  Eventually government had to provide relief materials for some of the affected farmers and this prompted NAIC to start thinking of how best to reach out to these farmers, he said.

He confirmed that about 10.5 million farmers have been registered for the e-wallet programme saying under the scheme farmer would be covered based on fertiliser bought from government.

On how e-wallet is works, Opadokun said “we reasoned that if government has been able to support by distributing fertilisers to farmers via the use of telephone we can as well do something for farmers in the form selling insurance to them.  We designed a product that for everybody buying a bag of fertiliser, which we know will conveniently cover of one acre of farm land, we will insure their risks.”

“In 2012, each farmer affected by flood was compensated with a sum of N22,000 so we decided to work around this figure to say for the one acre of land that a bag of fertiliser will cover, pay a token among of money as premium and you will have an agreed value, sum insured of N20,000. 

He said the corporation settled for N20,000 based on what was paid as compensation to each farmer in 2012 even as it believed that N20,000 would be significant to small farmers such that if any form of loss arises from flood, drought or pest, it will go a long way to make him go back to farming immediately.

Each farmer is entitled to two bags of fertiliser and if a farmer buys two bags of fertiliser he will be able to pay two times of the premium, he added.
Opadokun also said the programme does not stop the corporation from its normal agricultural risks underwriting business the corporation of approaching potential customers to take measurement of their farmlands and have a predetermined sum insured per farmland.

“Because of the mode of distribution that we want to use we are limiting it to a sum insured of N40,000 believing that a farmer will buy the maximum bags of fertiliser which is 2,” he explained.