Heifer partners PULA, Leadway, OLAM on crop insurance for rice farmers

HEIFER INTER NATIONAL, THE GLOBAL nonprofit organisation which says it is on a mission to end global hunger and poverty, is collaborating with PULA, Leadway Assurance and OLAM to implement a crop insurance scheme designed to protect rice farmers in the country.

The scheme comes with Heifer’s introduction of what it calls Area Yield Index Insurance (AYII) to Nigerian rice farmers as a solution to mitigate their losses and restore investor confidence in rice farming.

The nonprofit said AYII is used globally to ensure farmers get full returns if insured farmland does not produce the projected quantity of crops and also guarantees that farmers do not suffer loss, ensuring the sustainability of their agribusinesses and incomes.

Heifer International, PULA, an agricultural insurance and technology company, OLAM, the agriculture and commodities multinational, and Leadway Assurance are jointly implementing the scheme in Nigeria to cover the hazard shared by most farmers in the country.

Designed by PULA and supported by Heifer International, the scheme is expected to raise farmers’ awareness to the benefits of insurance and also attract more financiers to the sector to improve financial resilience for millions of farmers.

The focus on rice is seen as timely. Rice production in Nigeria has been considered a significant agribusiness venture, underpinned by the country’s high consumption and demand for the staple crop, and its cultivation in Africa’s top producer has recorded a steady growth in recent times, according to market reports.

Despite the increased productivity, many Nigerian rice producers who are notably small-holder farmers have at some points in time, encountered challenges ranging from insecurity to flooding, farming hazards and other worrisome conditions that have hindered production, resulting in poor cultivation and losses.

According to a Climate Action Digest report, Nigeria is the 55th most vulnerable country to climate change and 22nd least ready,with climate change projected to cost six percent – to 30 percent of the country’s GDP by 2050, translating to $100 billion – $460 billion in losses.

It will be recalled that in September 2020, farmers in northern Nigeria lost over two million tonnes of rice, a quarter of the country’s projected harvest to flooding. Kebbi, the country’s biggest rice producing state, that had hitherto projected 2.5 million tonnes in 2020 also suffered heavier than expected rainfall which washed away more than one million tonnes of rice from smallholder farms

The new insurance scheme is being implemented under Heifer’s Signature Programme “Naija Unlock”, which aims to unlock Nigeria’s potential for food self-sufficiency and enable one million people to reach Sustainable Living Income by 2030 through strengthening local market systems and promoting innovative agribusiness models in the rice, tomato, and poultry value chains.

Rufus Idris, country director of Heifer Nigeria, commenting on the relevance of the scheme to Nigerian rice farmers, noted that constant exposure to unreliable weather conditions, new pests and diseases, cripple farmers’ businesses and discouraged agribusiness financiers and investors.

Idris explained that the AYII provides rice farmers in Nigeria with an affordable way to mitigate the impacts of climate change on their businesses, adding that insurance is an innovative financial solution that can increase the resilience of smallholder farmers in Nigeria.

Idris observed that most smallholder farmers in Nigeria see insurance as a burden without any benefits. He however emphasised that when farmers are interested, the cost can be prohibitive, as they have to pay for it at the beginning of the farming season, when their limited funds are needed for inputs and preparing the land.

He further stated that Heifer’s investment in pioneering the pay-at-harvest AYII among rice farmers in Nigeria will help increase farmers adoption of crop insurance and stimulate sustainable private sector investment in insurance and rice production.

“The insurance will be pre-financed, with smart rice farmers taking up the AYII coverage and paying it back at harvest when the off-taker buys back the rice produced.