To mitigate harvest losses suffered by farmers to pests, drought, prolonged dry spells, soil moisture stress and other climatic conditions attributable to the negative impact of climate change, Leadway Assurance, Agri-technology businesses indemnified about 3,110 smallholder rice farmers in Benue and Nasarawa states with N111.4 million claims payment.
Leadway Assurance, in collaboration with Heifer International, Olam and Pula Advisors, an agricultural insurance and technology company provided Agric-insurance cover- the Area Yield Index Insurance AYII, Pay At Harvest (AYII-PAH) initiative.
This 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 to pay for insurance premiums when it is financially convenient for them to do so.
The cover compensates the farmers for yield losses suffered at the end of a cropping season. The insurance premiums paid to the farmers were prefinanced by Heifer International, the implication of which is that the farmers, who are usually constrained by cash to buy farm inputs at the beginning of the farming season, now 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 those who have suffered losses during the season.
The underwriting firm explained that Olam took the harvested rice paddy from the farmers, thereby guaranteeing a ready market for the harvested rice paddy, adding that either way, it amounts to a win-win situation for the farmers.
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Speaking at the ceremony for the claims payment in Makurdi, Benue State, Head of Agric and Micro Insurance at Leadway Assurance, Ayoola Fatona, said compensating farmers for losses suffered during their production was crucial to boosting investors’ confidence in unlocking opportunities in the agricultural value chain towards engendering food security on the continent.
“By extension, this is Leadway Assurance’s contribution to guaranteeing food security of the country. In the 2021 farming season, we insured 4,358 hectares of farmlands of over 4,354 farmers in Benue and Nasarawa states.
“Today, with the payment of the claims amounted to over N100 million directly to the farmer’s bank accounts, we have ensured that 3,110 of these smallholder farmers would not lose their investments due to soil moisture stress occasioned by prolonged dry spells and mild droughts. The farmers now truly believe that insurance truly works,” he stated.
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