Nigerian agriculture is particularly vulnerable to climate variability. Over 90% of crop production is dependent on rain-fed systems. The agricultural sector contributes 42% of the country’s gross domestic product, and employs about 70% 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.
The country 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. As the threat of climate change looms, the need to reform this scheme has become urgent and pressing.
The Central Bank of Nigeria has recently launched the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending. One of the key components of this transformative programme is the scale up of agricultural insurance. This will support the expansion of credit to the agricultural sector and help build farmer’s resilience against climatic disasters.
As a follow up to this process, The Nigerian Climate Action Network in collaboration with International Centre for Energy, Environment & Development, Nigerian Meteorological Agency and National Insurance Commission are investigating the possibility of introducing climate index based crop insurance in Nigeria, as part of a broader agricultural insurance reform process.
This workshop on Climate Based Insurance in Nigeria will hold on July 28, 2011 at the Transcorp Hilton Hotel, Abuja. The workshop seeks to validate a baseline study on climate based agricultural insurance in Nigeria; outline a draft work plan for agricultural insurance reforms; constitute a national committee for the implementation of the work plan; and enhance stakeholder awareness on the reform process.
Participants will be drawn from federal government agencies, financial institutions, farmer’s groups, media and civil society.