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Climate change puts farmers in debt

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By Mercy Kelani

Lack of insurance coverage makes farmers unable to rise from huge flood losses.

Impacts of Climate Change in Nigeria have plunged many Nigerians farmers into debt and has threatened Food Security in the country as many farmers have failed to embrace mitigation measures like adequate Insurance coverage. Julde Atiku, a 74-year-old rice Farmer in Ardo Kola LGA of Taraba State, lost a N4 million Investment of rice farming gathered through a Loan as a result of flood from the last rainy season. Adamu Inuwa and other farmers from a neighboring community suffered similar fate and pleaded with the government to intervene.

The National President of the All Farmers Association of Nigeria (AFAN), Kabiru Ibrahim, asserted that the farmers would not have suffered such great loss and having to wait for the supposed intervention of the government if they had the required insurance coverage. The 2022 flood destroyed over 500,000 hectares owned by many smallholder and commercial farmers and is described as the worst in the country within the last decade. According to the National Emergency Management Agency (NEMA), about 600 people were killed by the flooding while over 1 million people were displaced.

Agriculture insurance cover is low in the country.

Suleiman Adamu, the Minister of Water Resources, said that controlling the effect of flooding in Nigeria would take three decades of consistent investment. This predicts more natural disasters ahead and the need for insurance coverage as mitigation measures. Unfortunately, agricultural insurance coverage is very low in the country, given the fact that it has significant contribution to the Gross Domestic Product (GDP) of the country and the largest employment sector which ensures provision of jobs for about 36 percent of the 200 million population.

Aluu, a bird farmer, who was at the verge of gaining over N30 million from his Poultry lost all his birds as a result of the flood-related crises that struck in Bayelsa State. During the flood, there was difficulty in accessibility to quality feeds and medications to care for his 10,000 birds. The birds also suffered water-borne infections which led to the death of 9,400 birds. In total, he lost N75 million as he only insured his workers and birds against theft and not natural disasters.

There should be creation of awareness for insurance products.

The Director General of the Nigerian Agribusiness Group (NABG), Dr. Manzo Maigari, stated that insurance is a vital step that should be taken by farmers for mitigation of effects of climate change. He asserted that Agriculture should be regarded as business and owners should ensure involvement of insurance companies to begin their businesses. Most farmers, however, usually do not want to buy insurance products due to low awareness, mere wishing against disaster or lack of trust which makes them believe they may not get timely compensation when the need arises.

According to Executive Director of Technical Operations of Coronation Life Insurance Ltd, Adebowale Adesona, affirmed that climate change crises does not only affect the customers, it affects the insurance companies also. He continued by saying that climate change is getting complexified and many insurance companies in Nigeria and around the world avoid developing products concerning it for lack of understanding of the pattern. Development of the right products around climate change would organize stakeholders in the industry and climate modelers would model the impacts to be developed into products.

AFAN with NAIC suggests fleet insurance for farmers.

A former Head, Small and Medium Enterprises (SME), Allianz Nigeria Plc, Louis Alozie, at a webinar in November, 2022, titled “Importance of Insurance for SMEs” noted that there should be flexibility, seamlessness and more transparency of insurance policies. There should be sensitization of Nigerians for adoption insurance mechanisms. AFAN National President, Kabir Ibrahim, added that the association was deliberating with NAIC about having fleet insurance so that farmers can pay a token as premium for insurance of their farms.


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