Risks Mitigation in the Poultry Sub-sector in Oyo State: A Case Study , of the Nigerian Agricultural Insurance Scheme

Abstract

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 mitigatingfinctions of the Nigerian Agricultural Insurance
Scheme in the poultry sub-sector in Oyo State. The study found that participation in the 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-scalefarmers.
Only a very@ large-scale farmers are currently holding policy. The scheme has hmever done well in allming
participating fanners increased access to credit, which has culminated in boosting of production andfamz income.
About 74% of farmers that reported losses between 1989 and 1995 had their claims@lly or partially settled.
Hmever, majority of those who had received compensations complained that the 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
impraved performance, it is recommended that premium rate be reviewed downward, compensation payment be
stepped up, 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 presen t covered.