After losing the huge sums they invested in different agricultural projects, the hope of many of the affected farmers to mitigate their losses with compensations from insurance companies whose policies they invested in has been dashed for ‘strange’ reasons. Consequently, some of the affected farmers developed stroke or died from shock because they had nothing to fall back on. INNOCENT DURU reports that with most insurance companies in the country not ready to risk policies in such trends as climate change and attacks by herdsmen, among others, farmers are lost about the need for an insurance cover.
Prince Wale Oyekoya, a former Chairman of the Lagos Chamber of Commerce and Industry on Agriculture, was not so perturbed after suffering a major loss on his investment following an avian flu attack on his farm, because he had hoped that an insurance policy he had taken would help mitigate his loss.
Armed with his documents, he headed to the office of the Nigeria Agricultural Insurance Corporation (NAIC) in the hope that they would evaluate his loss and compensate him accordingly. That, however, was never thecase. His face wore sudden wrinkles while sweat dripped from every pore in his body as he could not come to terms with his plight.
Recalling his sad experience, he said: “I was personally disappointed by NAIC, a federal insurance company for that matter. They know how to collect your premium but shy away when it comes to paying claims. They come up with so many excuses from records keeping to the management of the farms.
“I lost over five N5 million to Avian flu from my poultry. I thought I was fully insured by NAIC but not a single penny was paid for some inexplicableexcuses. I even took my case to their head office in Abuja but nothing was done.”
He added: There is too much deceit and corruption in the NAIC organisation. Farmers are supposed to be well taken care of by the government and its agencies but they are the ones killing the sector. And the CBN (Central Bank of Nigeria) is not an exception. How could you be rolling out policies worth billions of naira to farmers through the so-called interventions with no adequate insurance to back it up?”
In a tone that conveys his displeasure with the system, Prince Oyekoya said: “The insurance companies, especially NAIC, have not been helping farmers in any form. Instead, they always claim that agriculture comes with so many risks. I wonder if insurance is not meant to cover risks and why insuring if there are no risks involved?
“Farmers have been beaten and ignored for too long by the government and their agencies, and that’s why there are food crises and shortages in the country.
“Bandits and kidnappers are having a field day with farmers and no insurance to cover the loss. Some of my colleagues were kidnapped on their farms and had to pay 15 to 20 million naira as ransom and there is no insurance to cover this loss.
“Before, we used to say that famine and food crisis were imminent, but that is no more the case as the crisis is right in our homes and everywhere now.”
National Vice President Cat fish and allied fish association of Nigeria, Chijioke Uchegbu, is another farmer who does not have a good story to tell about agricultural insurance in the country even though he believes it was a policy that was well intended for the good of farmers.
He said: “I didn’t get any compensation for the losses I suffered. This is why to our people here insurance is not getting enough patronage. There is a total loss of interest between insurers and agricultural investors.
“There are always ploys to make sure you don’t get the compensation. May be that is the orientation that they have because they don’t want to fulfill it.
“Once they collect two per cent of the facility, they don’t care because they want you to fail. They are looking at what to save and not what to pay to the farmers.”
National Vice President of All Famers Association of Nigeria in charge of root and tuber crops, Chief Daniel Okafor, also lamented that his members who took insurance covers for their farms did not get any compensation after they recorded losses.
“Some of my members took insurance policies in the past but they were not paid any compensation. Some members said when it was time to pay, they (insurance companies) would start giving you reasons why they wouldn’t pay. This is what makes people not to take insurance in Nigeria.
“Our members have lost a lot and they did not give them anything. The Ministry of Humanitarian Affairs is supposed to look into the problems of farmers but they don’t. NEMA couldn’t do anything to help our members. The insurance they are talking about couldn’t do anything.
“The Ministry of Agriculture that has assisted us a little couldn’t do anything. The whole thing is all about losses, losses and losses.”
Chief Okafor, who said he was at an awareness programme organised recently by NAIC, is disturbed that critical issues confronting farmers are not included in insurable risks.
He said: “I asked them if they would insure our farms that are being attacked everyday by herdsmen, they said they are not sure because the menace of herdsmen is too much.
“They also said they cannot insure climate change because they are not experts in it. Some of our members have died.”
The Chairman of All Farmers Association (AFAN) Lagos chapter, Otunba Oke Babafemi, said: “Most of our farmers don’t reckon with these insurance companies because they hardly fulfil their promises.
“Many of our members didn’t get compensation for their losses. They are not being encouraged. Are they paying? Are they encouraging farmers?
“We that are in the association are doing it because we just have to do it. At times you want to get a loan and one of the criteria is that you have to have insurance for your farm. That is one thing that compels one to take insurance.
“Last year when we planted rice at Itokin, it was a huge loss. What we are expecting from it is not up to what we invested.
“We had the challenges of COVID-19 and climate change. For three months it didn’t rain and it really affected the farm.
“The farm was insured but they didn’t include the challenge of COVID-19 and climate change when we took the policy. That was why we didn’t bother asking them for compensation.
“We have learnt some lessons about insurance now. we will still do insurance.”
Implications of not getting compensation
Dissecting the implications of recording losses and not getting compensated for them, the Director General of Nsukka Chamber of Commerce, Dr Dan Ochi, said: “The implication is huge, especially when you are farming using a credit facility from either the Anchor Borrowers or the CBN Commercial Agriculture loan.
“The purpose of insurance is for you to have something to fall back on when there are unexpected losses.
“But when the insurance is not forthcoming, it is the grace of God and angels that will save such farmers from financial embarrassment from financial institutions.
“When such a thing happens, first you will have an attack. You may have a high BP that could lead to stroke.
“If you have some of these terminal sicknesses like high BP, diabetes and all that, the thing would just escalate. And before you know it, you will find that you have partial stroke or full stroke and then death.”
He noted that the idea of a National Agricultural Insurance Corporation (NAIC) was well intended, but “the problem we have is that the majority of the farmers don’t know about this insurance company.
“Even though the establishment of NAIC is a good policy to protect farmers from losses, about 90 per cent of farmers do not know about the existence of this company, their role and their importance.”
Row over exclusion of natural disasters, herdsmen attacks from insurable risks
Many farmers have expressed concern on why NAIC and other insurance companies would not compensate victims for losses caused by climate change, natural disasters, attacks by herdsmen, among others.
Mrs Tolulope Daramola of Menitos Farms said:
“Even if NAIC say they are offering me insurance, it really doesn’t make sense to a lot of farmers, because the insurance they are offering doesn’t cover the real hazard that we face.
“It covers what I call assumed hazard, but there are new issues that come up in livestock rearing every day.
“If NAIC is serious with agricultural insurance they should really be dealing with the real issues we are dealing with.
“No farmer is actually going to neglect their birds. Now we have the challenge of global warming that is creating a lot of issues and nobody is dealing with that.
“NAIC needs to be more in touch with the real farmers that they are continually trying to cover. NAIC is not offering anything as far as agriculture is concerned. You will hardly hear any farmer talking about getting NAIC insurance.
“As far as I am concerned, in practical terms, there is no actual insurance for farmers. When they talk about farmer education, are the farmers actually aware of the corporation and its responsibilities?
“There are very few of us who had even bothered about insurance. Do you expect somebody who has a lower market than I do to go through that process and not get frustrated?
“A lot of farmers would not look at insurance as long as it does not really provide any sense of security. Insurance is supposed to give you a sense of security.”
The Director General of Nsukka Chamber of Commerce, Dr. Dan Ochi, said: “Four the past four years, there has been the issue of herdsmen attacking farms but insurance companies don’t cover that.
“We have seven hectares of Nsukka yellow pepper farm that was attacked by herders on 14th and 17th of November. They took their cattle into the farm.
“The government should look into the possibility of including this new phenomenon into the agricultural insurance and creating awareness for farmers to actually take insurance.
“Some insurance companies should be willing to write off the cost in this new area if there is established evidence that your farm has been attacked.”
We’ll never invest in insurance again
Hounded by their unsavoury experience with insurance companies, some of the affected farmers have vowed not to have anything to do with insurance companies again.
“Hell no. Once bitten twice shy. They are not there to help farmers but their pockets,” Prince Oyekoya said when asked if he would reconsider taking an insurance policy.
“Farmers are helpless in this country. The CBN interventions do not get to the real farmers but their cronies and a few selected ones.
“You know I used to be the chairman Agric sector of the Lagos Chamber of Commerce and Industry, and I was privileged to see the rots and corruption in the agric sector where the government concentrated on funding to the North and our southern governors are busy fighting for allocations from Abuja, neglecting agriculture in their states.”
His position was also taken by the National Vice President Catfish and Allied Fish Association of Nigeria, Chijioke Uchegbu, who said: “From experience, I will not want to invest in insurance again.
“But in a normal situation, insurance is good. It was a good intentioned initiative. But where you will be making claims and it will be taking two to three years, is it not discouraging? And it may not be paid eventually.”
Chief Okafor said the only thing that “will make me insure my farm is when I am sure that when any eventuality happens, they will pay me. If I am not sure, I will not insure the farm. I want to start from next year to insure all my farms.
“It is not just about the farmers paying money to insure their farms. What are they going to gain from the insurance? That should be our focus.
“Insurance will be good if anything happens and they come to our aid. If not, if they keep speaking grammar, I will not insure anything. I will leave it in the hands of God, believing that He will protect us.”
Dr Ochi said it would take the grace of God and also the level of the concerned farmers’ education and belief to take insurance again.
“Even when they take insurance policy, it is not easy for you to recover your money, because the companies will be manufacturing one million excuses why a loss cannot be covered and why they should not pay you.
“You know they are also out to make money. The lesser the claims they pay, the more money they make.”
Farmer decries obstacles to getting insurance cover
Aside from the challenge of getting compensation after recording losses, Tolulope Daramola said the process of getting insurance cover is a herculean task which discourages many farmers.
“I have not been able to successfully get an insurance cover for my business. At different times I had tried to get an insurance cover but then the conditions that are often required are not in tandem with the requirements of the land and assets.
“I have a farm in Itori that has a shared C of O. When you try to take a loan, they will tell you they want the traditional C of O, which most farmlands do not have because they are on long term lease and not outright purchase from the government.
“When you are going for an insurance and they are asking you for a document that they are aware is not legally available at least for everyone, automatically, you are being told that you don’t have access to that facility.
“If I say I want to insure my poultry, do I come to the insurance company anytime I buy feed? Does the insurance company come to validate the value of my birds? Are they taking cognizance that I run a daily business that could have a daily mortality of incidents?
“Yet we are being told we are not covered for natural disasters. So, at the end of the day, what am I going to insure against?
“When they say you are not insured against natural disasters as a farmer, what are you insuring against? Fire? What kind of fire? I don’t cook on my farm.
“The major thing a farmer needs an insurance against is actually natural disasters. Right now, for farmers, global warming, climate change is a natural disaster.
“We are having to relearn the systems we have been using over the years. And so when you say you want an insurance cover for your livestock and you are being told they are not liable for mortality due to natural disasters, I am not going to come to the farm and kill my birds.
“If because of an unexpected rise in temperature I lose my birds, who is liable? You are waiting for my birds to be wiped out by flu before you can insure me?
“I am not seeing the relevance because I am definitely going to take every preventive measure against my birds falling sick.”
NAIC declines comment after requesting for questions
The authorities of NAIC have declined comments on the allegations made by the farmers.
The spokesperson, Magdalene Omosimua, said she was at an official assignment when our correspondent contacted her on Wednesday.
She however requested that he ( our correspondent) should call back on Thursday by 11 am. When she was contacted as she requested, she demanded that the questions should be sent to her via WhatsApp for onward delivery to the corporation’s technical team.
She acknowledged receipt of the message in which deadline for submitting the report was stated.
The Managing Director, Mrs Folashade Joseph, last month said the corporation generated N8.6 billion insurance premium from farmers in the last five years.
Before then, 2020 to be precise, she claimed that NAIC had paid out about N2.0 billion as compensation to various categories of insured farmers across the nation ” but the corporation, among other questions asked by our correspondent, failed to provide incontrovertible evidence of farmers that benefited from the said claims.
Providing background about its establishment, NAIC on its facebook page posted: “The scenario before the advent of NAIC was such that farmers kept suffering losses on their investment on seasonal basis with no means of going back Nigerian Agricultural Insurance Corporation is wholly owned by the Federal Government of Nigeria. It was establish in 1987 to provide risk cover to Nigerian farmers. It is also the only existing insurance company owned by the Federal Government due to its unique socio–economic benefits to the populace.
“The need for a specialized Agricultural Insurance Company to provide insurance cover to farmers was informed by Government’s concern over the vacuum created due to the unwillingness of conventional Insurers to accept Agricultural risks, which they considered too risky. The implementation of the scheme was thus initially vested in the Nigerian Agricultural Insurance Company limited, which later turned into a Corporation in 1993 by the enabling decree No. 37 of 1993.”
