Climate change presents an unprecedented challenge for Nigerian agriculture. In the year 2010, the spate of floods in almost all parts of the country destroyed farmlands. This has resulted in higher food prices, heightened food insecurity, rising demand for imported food and is exacerbating rural poverty. This year’s floods only add to the problems that farmers face. Should this trend continue, Nigeria’s efforts to meet Millennium Development Goals will be jeopardized. Nigerian agriculture is particularly vulnerable to climate variability. Over 90% of crop production is dependent on rain-fed systems. The agricultural sector contributes 42% of the country’s gross domestic product, and employs about 70% of the total labour force. The limited coverage of irrigation, mechanization and use of key farm inputs heightens current vulnerability, and will compromise efforts to reduce poverty and grow the wider economy. United Nation’s models on the future climatic scenario for Nigeria predicts daunting prospects for Nigerian agriculture. In the next two decades, Nigeria will experience shorter rainfall seasons with high intensity of precipitation. A higher average temperature is also predicted, especially for Northern Nigeria. Should the current rain-fed small scale agriculture remain the predominant structure of the sector in the coming decades, Nigerian agricultural economy will face an uncertain future.
Farmers are most affected and according to scientific research, it would get worst. Farmers entire savings on crops and investment in their farm are usually lost during disasters . The internationally proffered way to address this is to provide insurance to allow farmers balance their risk, so that when it does not rain, or when there is a flood, they have what to fall back to. In Nigeria, less than 1percent of farmers have access to insurance cover. This confirms that the Federal government is not fulfilling its obligation to the agricultural sector. The mismatch between 42% GDP coming from agriculture and less than 2% of all credits from banks going to support agriculture is huge. Less than 2% of all bank lending to the private sector goes to agricultural insurance. The Central Bank of Nigeria has recently launched the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending. One of the key components of this transformative programme is the scale up of agricultural insurance. This will support the expansion of credit to the agricultural sector and help build farmer’s resilience against climatic disasters. As the threat of climate change looms, reforming this scheme becomes urgent and pressing. This calls for a strong need to reform agricultural insurance .Government response is inadequate because a single government company is allowed to be in charge of agricultural insurance Nigerian Agricultural Insurance Corporation NAIC.
This monopoly doesn’t point to the future. The International Center for Energy, Environment Development ICEED brought together all key actors, the National Insurance Commission NAICOM, Central Bank of Nigeria CBN, Ministry of Agriculture, Nigerian Meteorological Agency NIMET to develop a national platform to launch a comprehensive report on agricultural insurance. Four pillars were identified as measures that should be in place to reform agricultural insurance.
- Need to understand and build more infrastructure to monitor weather data, support NIMET and build its capacity.
- A legislative review to amend the NAIC act to liberalize the agricultural insurance market to allow participation of the over 50 registered insurance companies.
- Build the capacity of the insurance industry to understand and be able to have departments and key people who can design new insurance products
- Educate farmers.
A consensus was reached to establish this national implementation committee on the reform of agricultural insurance and publish an implementation framework for the committee. Addressing climate change disaster on agriculture is urgent to help farmers and ensure food security.
For more information on ICEED, check http://www.iceednigeria.org/