FEPSAN Targets Expansion Of Fertilizer, Insurance Package To 3.9 Million Farmers
Through partnership with pan-African index insuretech firm PULA. The Fertilizer Suppliers Association of Nigeria (FEPSAN) has engaged over 60 stakeholders in the agricultural sector at a workshop on Tuesday in Abuja to discuss the potential of adding Area Yield Index Insurance as part of their offering to farmers.
The potential partnership, which would bundle insurance with up to 14 million bags of fertilizer, could see as many as 3.9 million farmers benefiting from climate insurance in 2020 and up to 19 million by 2025.
FEPSAN Chairman, Thomas Etuh, says Area Yield Index Insurance can be a lever for helping farmers cope with weather and other peculiar risks while scaling adoption of fertilizers among small farmers.
“We believe that through adding insurance we will kill two birds with one stone; improve our farmers’ resilience and grow adoption of fertilizer in Nigeria”, he said.
Farmers across Nigeria currently face a range of risks such as climate-induced drought, excessive rainfall, pests and diseases, among other challenges that undermine their ability to acquire good yields and incomes.
Pula’s proposed Area Yield Index Insurance solutions, which would compensate farmers in the event of climate or other catastrophes, be an important intervention that helps farmers manage risks and build sustainable farming enterprises that can withstand shocks.
Pula Advisors is a specialist advisory firm offering comprehensive risk analysis and assessments, quantifying risks and developing mitigation and transfer options such as index-based insurance for our clients.
This insurance also provides financial security that gives farmers confidence to invest in additional inputs like fertilizer, knowing that their investment will be protected by insurance in the event of crop failure.
Pula has proposed working with fertilizer companies within FEPSAN and Nigerian insurers to package insurance with their products. Pula CEO Rose Goslinga highlighted that while Area Yield Index Insurance will first and foremost benefit farmers, it also makes business sense to the participating fertilizer companies as insurance creates an opportunity for these companies to build a strong brand with farmers and gain new customers.
“Embedding agriculture insurance to Fertilizer will enable these companies to understand farmers better while providing them with real protection. In the 10 countries that Pula works we have seen that companies adding insurance can grow their customer’s base by 30% in one year”, Etuh said.
In addition, the proposed insurance program is expected to avail several benefits to other involved stakeholders, key among them being the data it will generate.
During insurance registration, Pula collects critical farmer information and production data of farmers, which would allow participating companies to grow their customers through mobile-based marketing strategies.
The same registration process will allow for fertilizer to be digitally tracked from the warehouse to end customer, providing visibility that will eliminate the illegal use of urea in the making of explosives, which has become a growing national security threat in Nigeria.
The government would also benefit from the yield data collected at the end of the season to inform claims settlement, as such data will be key in helping policymakers understand the performance of various regions and crops and design targeted interventions based on real farm-level data.
The workshop was supported by development agencies and foundations including AGRA, the Gates and Rockefeller Foundations, UKAid, and USAID and convened by Pula. Pula is an insurance and technology that provides weather and yield based index insurance cover for smallholder farmers in more than 10 different countries across Africa. Their insurance products have been deployed to over 1 million smallholder farmers in 2019 alone.
By Tribune Online On Nov 5, 2019