The
Managing Director, Nigerian Agricultural Insurance Corporation (NAIC), Mr. Bode
Opadokun has commende the medium and commercial farmers’ disposition to
insurance cover saying the small scale one should emulate in order to mitigate
losses. He pleads for prompt government payment of 50% subsidy premium for
farmers in his interview with food farm news as he advocated for government
support in area of market for the producers. Read his excerpts below.
My name is Bode Opadokun, I am the
managing Director and Chief Eexcutive officer of Nigerian Agricultural
Insurance Corporation (NAIC), the only surviving insurance company owned by the
federal Government and saddled with the mandate and responsibility to address
the issue of risk management of agricultural insurance production in the
country.
From your resumption as the MD of this corporation till
date, what are some of the achievement you can point that has make a unique
difference in the actualization of farmers taking insurance more serious in the crops production?
Thank you very much I would like to
start within in terms of the achievements. We start with internal orientation
as you can only give what you have, you cannot give what you do not have. We
started with management retreat which cut across the heads of the entire branches
from all the states as we are able to draw a well defined mission and core
value for the corporation.
At the retreat we are able to come up with six
strategic business initiatives for ourselves and corporation where we will be
able to look at or create a pillar upon which the company can stand on. What we
do at the retreat which of course bring about the new business plan that we are
already using is ability to clearly identified what is expected of us with how
we can play this role to achieve
positive impact that is tailored around our mandate for agricultural
development in terms of mitigating losses. We observed that not many farmers
know about our existence talk less of knowing the benefit they can derive from
our activities for their farming progress.
We have been to achieve more
awareness creation in this regards through media and other means of publicity
like organizing workshops and sensitizing farmers on our roles to them in the
face of the Agricultural Transformation Agenda of the Federal Government of the
past government which of course the present government will give the sector
topmost priority.
I always tell my staffs that change has already started in the
corporation even before the now and what this means is that change is constant.
We cannot continue to do the same thing the same way and still expect a
different result. For you to have a different result there must be a different
way at which we need to do things for a positive impact. Also we have been able
to reach the farmers through the media different articles on newspapers and
feature story in the electronics of television and Radio, and of course this
interview is also meant for the same purpose.
With this media strategy, the feedback
we are getting is that more people are now aware of the existence of the
corporation and the role we can play in the agricultural sector. Also we have
been able to put in place an improved business process. Prior before now the
business process we have through the soft ware is not as effective as what we
now have as we are not fully computerized before my resumption. But now we have
introduced ICT into our business operation in order to be more competitive
among others as we have got software by which all our insurance products are
well written.
It is robust software which of course is going to have a very
positive effect on our activities as our turnaround time will be shortened in
terms of response time to our customers’ claims and settlement in particular
which is the primary reason why we are in business. It is not a privilege for a
client to be settled but it is their genuine right as it is when they are
satisfied they can purchase more and tell others. Also, it is only a satisfied customer
that will tell other people out there about our performance in terms of what we
do and how it can add value to what they are doing.
Also we have been able to
enhance the status of our Lagos state office to a level of head office annex
due to high traffic commercial activities in this centre as over 90% of all the
Insurance companies have their head offices in Lagos due to volume of business,
and fortunately the Lagos state government is also doing so well in
agricultural activities as we have been able to provide insurance services in
this regards to farmers in the state which has increased our premium income. By
the virtue of the license that enables us to engage in other commercial
insurance activities apart from agriculture is also more of the reason why our
Lagos office has to be repositioned to do what we call general insurance
business as you will agree with me that farming has gone beyond cutlass and
hoes, but rather many people are now going into mechanized farming.
The tractor
and other farming equipment for production and processing are what we provide
insurance cover for. In the time past most people though that all what we can
do is crops and livestock insurance, but we have made them to realize that we
can also provide insurance cover for the entire asset of the farming land as
business venture.
Now there are lots of activities that take place in
agriculture from farm to table, in between these two, a lot of activities take
place. For example the movement of produce from farm to the warehouse, and even
while in the ware house, what happens in terms of risk to fire while maize or
crop produce in the silo? If there is
fire incidence, all of this we have insurance cover for. And this has involved
the repositioning of the Lagos office to meeting all these business
opportunities towards registering our Corporation presence in the mind of
people for more business transactions and what making people know about what we
can do.
If I may ask, what is the response quality from the farmers
especially?
I will say
the response has been quite good, even though our expectation is quite higher
than what we are presently getting, but that is business. The reason why I said
that what we are getting is not quite to our expectation is because of the
belief and the cost due to economic situation. Some have already got this
attitude that once he or she prays to God; there will be nothing distrastrous
that will happen to his farms or asset which in most time does not play out as
they thought. With God all things are possible, and any evil fashioned against
me shall not prosper.
They believed so much on this faith more than doing the
right thing that will mitigate their losses when there is any of such. Also
some of them that show the willingness are being discouraged with the cost of
insurance and what we are doing is making them to understand that insurance is
part of the cost of any farming activity as once they realized this, it will
become part and parcel of the practice in their placement of price in the face
of cost and profit margin. Note that agriculture is no more poverty alleviation
programme but rather a business venture of wealth creation where all
precautions must be properly considered like insurance cover. If there is
anywhere we are having challenges is with the small scale farmers’ attitude
unlike the medium and large scale farmers who have wonderfully embraced the use
of insurance as a mean of mitigating losses. We have a quite numbers of them
with us now.
Another area of challenge is the subsidy side as the decree that
set up this corporation which has mandated us to charge 50% of all subsidies
given to farmers with the understanding that where the farmer domiciled shall
both the states and Federal Governments share the payment by 25% each.
Invariably what we have been charging our farmers is half of the 100% premium
when we are supposed to charge 100%, but we have not been able to get our
premium subsidy payment back from government as expected when due. It is this
payment we get as premium subsidy but not a subvention.. They give whatever
they feel, not what they are actually expected to pay in terms of service
rendered.
We have been pushing our case through the FMARD and former economic
minister in federal ministry of Finance is already put in the picture of our
challenges. But we have not really got anything for now. We have also presented
our predicament before the privatization agency under the presidency and both
the two houses of agricultural committee and finance committee at the National
Assembly. We will not relent until result is achieved to enhance corporation because
government not paying the premium on time can adversely affects our operation
by the time we are spending our reserve to subsidizing unpaid premium by the
government.
In the face of inadequate premium charges, how have you been
responding to claims?
The issue
is insurance is long time business and the training we are given is that
premium you collected is not our own money and we have to properly take care of
it because our business is futuristic in nature and we need to be very prudent
in spending. You cannot see the future but you can only assume what could
happen in the future.
So you have to manage your resource in case when the
expected happens, one should be able to meet your liabilities. So as a
professional we always ensure rein insurance arrangement (i.e. The insurer of
insurance) in place which means that we can pass our liability to rein insurance
and that is the way we can secure ourselves meaning whenever there is claim
that triggers beyond certain level, our rein insurance people will come into
our rescue as we also have to pay premium to the rein insurance too to secure
our continuityslot in case of any eventuality, we will be able to have a fall
back position.
That has one of the areas that have been helping us. The second
one is to ensure we invest the available premium or resources that will have in
a very good manner. We invest in the money market and some in the treasury bill
rather than putting the money in the current account where charges are drawn.
The proceed from this investment are used to cushion the effect of our
challenges.
We are generating income
from the asset that we have like rents which has been helping us to carry our
function just as we also make consultant services to generate income. Once a
while we do go out to impact knowledge on people by way of developing the
market at a cost to us at times which we
see as corporate social responsibility to developing the agricultural sector.
How would you react to assertion of farmers that claim are
not pay promptly with recent avian influenza outbreak?
The ascertion
I will say is ni the past not in the recent time because today we have
received formal letter from Lagos state
government commending us for a recently paying claim to some of their farmers.
I can show you the copy of the letter. We have also received such letter from
Osun state government for settling claim on the QIIP just as farmers have call
and sent text of commendation to us.
In recent time we have more of
commendation than condemnation do to our focused commitment to farmers’ genuine
cases for immediate, but not to fraudulent ones. This is a way of attracting
the interest of farmers to taking insurance risk very serious. On the avian
influenza, what happens is that majority of those who experienced the losses had
no insurance cover and those that really insured were settled. Our standard
poultry policy does not cover to avain influenze as this is an extension under
a standard poultry insurance cover.
It only those with extension policy on
standard insurance poultry that benefitted from the claims. But we had used the
occasion to sensitized farmers as recently we had one with Nigeria Poultry
farmers Association, o Lagos chapter. Things are more better than before and we
still want to do much better as measure of improvement.
What the way you want the sector to repositioned for better
performance of your corporation?
The government need to look at the funding and marketing in
order to assistant farmers to get more sale for their produce to eradicate the
issue of middle men. Also government should make farming loan a single digit
for farmers as this will support and encourages more production, and lastly
government should look at the policy that set NAIC in the areas where both
states and federal Government have to pay their premium subsidy to us promptly
as this will guarantee continuous existence of the corporation.
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