‘Agricultural insurance is farmers’ main problem’
Why do you think farmers, especially rice farmers, need to take insurance policy? Let me start by highlighting that for rice production, rice is water, rice needs 100 per cent water supply and farmers are located close to water source, mine is located close to the River Benue. This makes the farms prone to flooding. […]
Why do you think farmers, especially rice farmers, need to take insurance policy?
Let me start by highlighting that for rice production, rice is water, rice needs 100 per cent water supply and farmers are located close to water source, mine is located close to the River Benue. This makes the farms prone to flooding.
So in our case, we insured that area. However, the flood happened on September 16, 2015. There were two flood incidents, the first destroyed 40% of the farm while the second one affected the farm hundred per cent. This flood lasted for about seven to 10 days and we lost pretty much of all the crops. It was a 100 per cent loss.
What is your assessment of insurance policy as far as agriculture is concerned?
To be honest, I do not see reason for insurance policy but inasmuch as I need insurance, there is no point paying and then waiting close to a year before you get an offer and they end up giving you inadequate offer. You might as well take that money from the premium, gamble on nature and put the money in the farm.
How does the inability of NAIC to pay you on time, the compensation for the insurance policy you took, affect your farming activities?
This season we’ve struggled quite a bit. You know dry season is quite an expensive planting season because it requires a lot of irrigation – pumping of water. During the dry season, we need all the funds we can lay our hands on. I think we could have done a lot more if we have this fund available to us. This is what I’m trying to explain to them. There is an opportunity cost of them holding our funds for seven months and then making inadequate offer.
Was the insurance company you took this policy from aware of the situation?
The insurance company came before we planted, they came while we were planting, they came during the flood and they came after the flood. They came again after the flood to do their inspection and confirm that there was loss. However, I don’t know what is happening, because we took a full premium cover. This flood happened in September 2015, we did not get offer from the insurance company till March 2016. Now we have lost an entire planting season due to lack of funds. So why do we have insurance? NAIC now made an offer, after six months, of about 20 per cent of the total loss which the policy document covered, which is grossly unacceptable.
Did they tell you why they were making that offer?
The claims department was trying to persuade me to accept the claims, making it look like it was a favour. I told them look, you people gave me a code, I paid my full premium, you came to my farm before planting, you came while I was planting. The policy document, from your end, shows the full amount am insured for. There is absolutely no excuse for making such an offer.
How do you want to see agricultural insurance repositioned in this country?
I think insurance still has a long way to go, and government should take a better look at the structure of agricultural insurance as well as any other insurance company that insures agriculture and ensure that they adhere to their policy documents.
When a farmer insures and he incurs losses, the last thing we need is to rub salt in their wounds. You pay them off and allow them to move on from those losses as soon as possible. This is what the government needs to take seriously.