Professional Assessment of Crop Insurance Products for Smallholder Farmers in Nigeria’s North East Zone

Agricultural insurance provides a risk management mechanism that can break the cycle of crop loss and poverty for smallholder farmers in conflict-affected and climate-stressed zones, but the availability, uptake, and adequacy of crop insurance products for North East Nigeria farmers requires professional assessment. This study professionally assessed the design, delivery, and uptake of crop insurance products available to smallholder farmers in Borno, Yobe, and Gombe States, North East Nigeria. A professional assessment methodology was employed, drawing on product review of Nigerian Agricultural Insurance Corporation (NAIC) and NIRSAL Microfinance Bank insurance scheme designs, structured interviews with 15 NAIC and insurance broker officials, 60 farmer beneficiaries and non-beneficiaries, and 8 agricultural finance specialists. Assessment showed that uptake of any crop insurance product was below 8 percent among smallholder farmers in all three states. Primary barriers were premium unaffordability (cited by 74.2 percent of non-purchasers), complex claim processes (61.3 percent), and lack of awareness (83.9 percent). Index-based insurance products, where payment triggers are based on rainfall indices rather than individual field assessment, were found to have significant basis risk in the heterogeneous rainfall conditions of the North East. The study concludes that current crop insurance products are inadequate for the North East smallholder context. Recommendations include subsidised premium pooling at state level, simplified mobile claim submission, and area-yield index product development as an alternative to rainfall indexing.

Keywords: crop insurance, smallholder farmers, North East Nigeria, NAIC, agricultural risk management