Heifer International, a nonprofit organisation, says it has introduced the Area Yield Index Insurance (AYII) to Nigerian rice farmers as a solution to mitigate climate change-induced losses and restore investors’ confidence in rice farming.
AYII is used globally to ensure farmers get full returns if insured farmland does not produce the projected quantity of crops.
It guarantees that farmers do not suffer loss, ensuring the sustainability of their agribusinesses and incomes.
The scheme is being implemented in Nigeria by Heifer International in collaboration with three other organisations, namely PULA, OLAM and Leadway Assurance Limited, to cover the hazard shared by most farmers in the country.
The Country Director, Heifer Nigeria, Rufus Idris, was quoted in a statement as saying, “Constant exposure to unreliable weather conditions, new pests and diseases cripple farmers’ businesses and discouraged agribusiness financiers and investors.
“Area Yield Index Insurance provides rice farmers in Nigeria with an affordable way to mitigate the impacts of climate change on their businesses.”
Read also: NAICOM forecloses single capital requirement for insurance companies
According to Climate Action Digest, Nigeria is the 55th most vulnerable country to climate change and 22nd least ready.
Overall, climate change is projected to cost six to 30 percent of Nigeria’s GDP by 2050, translating to $100bn to $460bn in losses.
In September 2020, farmers in northern Nigeria lost more than two million tons of rice, a quarter of the country’s projected harvest due to flooding.
PULA’s Commercial Manager, West Africa Anglophone, Chukwuma Kalu, said, “With climate change and adverse weather conditions playing a crucial role in negatively impacting farmer’s productivity and earnings, there’s never been a more critical time for AYII to create a soft-landing for farmers that need protection against nature’s uncertainty.”
Olam’s Vice President for Farming Initiatives, Reji George, said, “Olam is committed to supporting the growth of smallholder farmers that we do business with; hence, we are happy to be a part of this innovative solution that improves financial resiliency among Nigerian smallholder rice farmers.”
