EFFORTS to establish a framework for a national climate-based insurance scheme have been kick-started, with the naming of a nine-member multi-stakeholder group to reform the agricultural insurance sector.
The initiative is expected to introduce measures to leverage on anticipated support from the international community to developing countries like Nigeria, scale up of agricultural insurance, support the expansion of credit to the agricultural sector and help build farmer’s resilience against climatic disasters.
To drive the scheme promoted by the International Centre for Energy, Environment and Development (ICEED), National Insurance Commission (NIACOM), Nigeria Meteorological Agency (NIMET) and the Nigeria Climate Action Network (NigeriaCan), a one day workshop was organized in Abuja recently.
The major highlight was the constitution of an implementation committee comprising the Federal Ministry of Agriculture (FMA), Federal Ministry of Environment (FME), Central Bank of Nigeria (CBN), Nigeria Agricultural Insurance Commission (NAIC), All Farmers Association (AFA), Nigerian Insurers Association (NIA), NIMET, NIACOM and ICEED .
Statistics have shown that Nigerian agriculture is particularly vulnerable to climate variability. Over 90 per cent of crop production is dependent on rain-fed systems. The agricultural sector contributes 42 per cent of the country’s gross domestic product, and employs about 70 per cent of the total labour force. The limited coverage of irrigation, mechanisation 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.
Environment Minister, Hadiza Mailafiya, emphasized on the need to raise local farmers’ awareness on the need to access insurance services. Represented by Dr. Samuel Adejuwon, Heads the Special Climate Change Unit (SCCU) in the FME, disclosed that the ministry had constituted a national committee to undertake preparatory activities for Nigeria’s “effective and efficient participation” at the COP 17 scheduled to hold by year’s end in Durban, South Africa.
“The climate change talks envisaged in Durban, I believe, will result in concrete financial transfers to developing countries including Nigeria, I therefore encourage us to embark on domestic reforms to leverage these anticipated support from the international community,” she said.
The NIMET Director-General, Anthony Anuforom, warned that if no adequate climate change adaptation was employed by 2020, between two to 11 percent of Nigeria’s GDP could be lost.
He said: “Statistic shows that average annual losses from weather related events were in the orders of $1 billion in 1990s, $35 billion in 2004 and almost doubled in 2005. In addition, it was recorded that, between 1980 and 2005, nearly 7,500 natural disasters worldwide took lives of over two million people and produced economic losses estimated at over $1.2 trillion.
“Executive Director, ICEED, Mr .Ewah Eleri said that 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 may exacerbate 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 jeopardised.
“Nigeria has significant experience in delivering traditional agricultural insurance schemes through cooperatives and government agencies. However, broadening the market for these risk management services are limited by several factors, including high transaction costs, regulation, product design and poor customer perception.”
Chinedum Uwaegbulam – The Guardian