NIRSAL Plc, a financial institution dedicated to agricultural development, has announced a strategic shift towards yield-based insurance in the agricultural sector, aiming to stimulate economic growth and enhance food security.
Speaking at the 2025 Annual Outlook Conference hosted by Meristem in Lagos, Akinola Baiyewu, Principal Manager of Agribusiness Finance and Investment at NIRSAL Plc, outlined the organization’s vision. He emphasized the need for innovative insurance solutions tailored to farmers’ needs, stating that the current indemnity-based insurance only covers input costs and falls short of addressing farmers’ challenges.
“The kind of insurance we are now looking at is yield-based insurance. It insures expected yields, not just inputs. NIRSAL has collaborated with Polar Consulting to roll this out with five insurance companies. We are also exploring microinsurance to cater to the lower market segment,” Baiyewu explained.
This initiative highlights a broader shift in product design to improve payment flexibility, enhance trust, and encourage private sector-driven self-regulation in the insurance industry. Baiyewu noted that while the sector is evolving positively, progress remains gradual.
During the panel discussion, Baiyewu advocated for larger-scale farming to improve food production and exports. Comparing Nigeria’s agricultural landscape with developed nations, he emphasized the importance of scaling operations to reduce costs, enhance quality, and boost yields.
“Yes, we want to support smallholder farmers, but it’s time to focus on large farms that can negotiate better prices, meet quality standards, and improve productivity,” Baiyewu remarked.
Babatunde Oguntade, President and Chairman of the Governing Board of the Nigerian Council of Registered Insurance Brokers, also highlighted the brokers’ involvement in agricultural insurance. He acknowledged the challenges brokers face due to subsidized premiums and lower commission rates but stressed the importance of improving agricultural insurance, especially after significant flood-related claims in recent years.
Oguntade further noted that commercial-scale farming is primarily concentrated in northern Nigeria, particularly in livestock, and called for increased activity to expand agribusiness opportunities across the country.
The shift to yield-based insurance represents a significant step towards addressing gaps in Nigeria’s agricultural sector. By supporting farmers with tailored insurance products and encouraging large-scale farming, NIRSAL Plc aims to strengthen food security, boost exports, and drive economic growth in the long term.
