Risks mitigation in the poulty sub-sector in Oyo state: A case study of the Nigerian Agricultural Insurance Scheme
Risks and uncertainties associated with agricultural business have to a great extent undermined the productivity and sustainability of the agricultural sector by reducing the availability of institutional credit for investment in agriculture. Hence, this article examined the risks mitigating functions of the Nigerian Agricultural Insurance Scheme in the poultry sub-sector in Oyo State. The study found that participation in tlie scheme, in terms of number of new farmers taking policy per year, has not been impressive despite 86.0% level of awareness of the scheme among non-participating farmers. Majority of the policy-holders (87%) are either small- or medium-scale farmers. Only a very few large-scale farmers are currently holding policy. The scheme has however done well in allowing participating farmers increased access to credit, which has culminated in boosting of production and farm income. About 74% of farmers that reported losses between 1989 and 1995 had their claims fully or partially settled. However, majority of those who had received compensations complained that he amount paid was small compared with their personal assessment of losses. The scheme has a high rate of turnover as only a few farmers who took policy at inception in 1989 are still doing so. Most of the current policy-holders (70%) joined the scheme late, for improved performance, it is recommended that premium rate be reviewed downward, compensation payment be stepped up, and commission on claim-free premium as well as the number of supervisory visits to farmers who are holding policy be increased. The scheme is also advised to become more comprehensive by covering more poultry diseases than are at present covered.
Key words: Risks mitigation, premium, indemnity, poultry sub-sector, agricultural insurance, Oyo State.