Revamping Nigeria Agricultural Insurance Corporation (NAIC)

The idea behind NAIC was visionary. It was established in 1987 and given legal grounding by Decree No. 37 of 1993 to provide affordable, reliable insurance coverage to Nigerian farmers. At that time, private insurers were reluctant to enter the agricultural space due to the high risks involved—ranging from floods and droughts to pests and […]

The idea behind NAIC was visionary. It was established in 1987 and given legal grounding by Decree No. 37 of 1993 to provide affordable, reliable insurance coverage to Nigerian farmers. At that time, private insurers were reluctant to enter the agricultural space due to the high risks involved—ranging from floods and droughts to pests and diseases.

The insurance scheme made it mandatory that all agricultural projects financed through one form of credit or the other, including government intervention programmes must be insured by the corporation. It provides for support of up to 50 per cent premium subsidy while the farmer pays the remaining 50 per cent.

However, more than three decades later, NAIC is still struggling. It remains undercapitalised, reliant on outdated manual systems, and largely absent in many rural communities where it’s needed most. The result? Farmers are left exposed, food production is threatened, and national programs designed to improve agriculture fail to achieve their full potential.

A prime example is the Anchor Borrowers’ Programme (ABP), launched by the Central Bank of Nigeria (CBN) in 2015 to boost food production through credit, inputs, and support for smallholder farmers. While ambitious in scope, ABP faltered largely because it failed to incorporate effective agricultural insurance. Funds were often released too late, planting happened outside optimal weather windows, and many farmers lacked any form of insurance cover.

Sadly, despite NAIC’s existence, the CBN chose to involve private insurers—mostly bank-owned—with little or no experience in agricultural risk management. When natural disasters hit, thousands of farmers were left stranded without compensation. Defaults on loans soared, poverty deepened, and over N600 billion in loans reportedly went unrecovered. This was a failure not just of execution, but of foresight.

NAIC itself cannot escape blame. It is burdened by inadequate funding, low staff morale, obsolete technology, and limited reach. Claims processing is slow and cumbersome. In today’s world, where climate change is wreaking havoc on farming cycles and insecurity continues to drive farmers off their lands, Nigeria can no longer afford to ignore the critical importance of robust agricultural insurance.

Revamping NAIC is not optional—it is urgent. The institution must be modernised. It needs to adopt digital tools that can automate claims, monitor weather patterns in real time, and provide swift, transparent communication with farmers. Partnerships with agricultural tech startups and experienced private insurers must be encouraged to expand product offerings and reach.

Crucially, the government must ensure that all beneficiaries of public agricultural programmes are insured. Insurance should no longer be treated as an afterthought or a luxury. For the modern Nigerian farmer, it is a necessity. With growing farmer-herder conflicts, insurgencies, cattle rustling, and environmental unpredictability, insurance offers the only real safety net.

In the same way that roads, seeds, and fertilizers are supported by government, insurance must be seen as a critical input in the agricultural value chain. Farmers who suffer losses due to conflict or climate disasters deserve compensation—not only to survive but to remain in business. Without this safety net, agricultural investments will continue to fail, and the sector will remain stagnant.

The appointment of a new management team for the Nigerian Agricultural Insurance Corporation (NAIC) is a vital step in the Federal Government’s Renewed Hope Agenda. This move signals a recognition that increasing food production and protecting the livelihoods of farmers must be prioritized to tackle the growing economic and food security challenges in Nigeria.

With experienced professionals now at the helm, expectations are high. They are tasked with revitalizing NAIC and aligning it with national goals.

Agriculture remains the backbone of Nigeria’s economy—providing livelihoods for over 70 per cent of the rural population and contributing significantly to GDP. Yet, this vital sector is persistently undermined by climate risks, poor access to finance, insecurity, and the absence of effective insurance mechanisms.

It is refreshing that the newly appointed NAIC leadership has already indicated its readiness to reposition the agency. According to the new Managing Director, their mission is to fully integrate smallholder farmers into the insurance ecosystem and use insurance as a tool to help resolve conflicts between farmers and herders. This is a vision that must be supported with the full political will of the federal government.

To truly achieve food security, reduce rural poverty, and transform agriculture into a driver of inclusive economic growth, Nigeria must fix agricultural insurance. And that journey begins with a bold and comprehensive reform of NAIC—an institution whose time to rise to its original mandate is long overdue.
Agriculture feeds the nation. It’s time insurance feeds the farmers with the confidence and protection they deserve.

Toro is the Director, Strategic Planning of MACBAN, Abuja