INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Agricultural insurance as an alternative for risk management started as crop insurance in Europe more than one hundred years ago and then spread to the United State of America at the beginning of the 20th
century. It has since then been embraced by a lot of the world like Canada, Mauritius, Zimbabwe, Philippines, Iran, Zambia and Nigeria with varying degrees of success and failures in agriculture production.In Nigeria there has been growing need since, 1976 to evolve a worthwhile and more permanent natural approach to risk management in agriculture and this has continued to attract the attention of the various government. To this effect, the Nigeria Agricultural Insurance Corporation was established by the federal government of Nigeria and funded largely by her with the participation of state government and the organized private sector. Nigeria Agricultural Insurance Corporation stated as a company but became a corporation in 1993 by the virtue of decree 37 of 1993.
The introduction and formal lunching of the Nigeria Agricultural Insurance Scheme by the president and commander in chief of the Armed forces of Nigeria, President Ibrahim Badamosi Babangida on the 15th
December, 1987 was designed to benefit the small, medium and large scale farmers from the effect of natural hazards in consideration of a determined price called premium.More so, NAIS is to ensure the payment of appropriate compensation sufficient to keep the farmer in business after incurring any loss on their insured farms.
In the result past, various government in Nigeria have launched different agricultural policies in their relentless effort to enhancing agricultural productivity. They also have committed a large sum of financial and human resources in their zealous desire to achieving an increased agricultural production but have continually and repeatedly failed. One of the reasons for this failure is that mist farmers in Nigeria have never discovered the need to insure their farms and other agricultural investment irrespective of the good objectives of the federal government in establishing the Nigerian Agricultural Insurance Scheme (NAIS).
Sourcing of funds has proved highly impossible because the lending institution also are supposed to fund agricultural development are quite doubtful of advancing loan to this sector because of the risks of uncertainty and insecurity. Consequently, the Nigeria Agricultural Insurance Corporation was set up to provide collateral security to the lender of institutions in the form of investments. However, the Nigerian Agricultural Corporation have not sailed smoothly because of the following problems.
Lack of reliable data on livestock and crop yield and losses, non-utilization of modern management techniques in livestock business, inadequate land record system, lack of understanding of what agricultural insurance is about on the part of the farmers, insufficiency of trained personnel to monitor effectively the insured, fraudulent practices by the clients and lack of necessary infrastructures are major problems confronting the agricultural insurance which if well addressed, the researcher believes will enhance the role of agricultural insurance in enhancing agricultural productivity.
1.3 OBJECTIVE OF THE STUDY
This research is bent on carrying out analytically the study of the number of farmers in Ezeagu Local Government Area with agricultural crop insurance policy. Other specified objectives include:
1.4 RESEARCH QUESTIONS
This research topic allows for many questions to be asked. This research was carried out with an attempt to answer these questions. It look into the role of agricultural insurance in enhancing agricultural productions raises some of these questions.
RESEARCH QUESTIONS
1.5. SIGNIFICANCE OF THE STUDY
Agricultural insurance unlike the conventional insurance is relatively new in Nigeria. Consequently, there are many problems involved in collecting data and other materials for research in the field of insurance. This problem underscore the significance of this piece of work hence, the study will be helpful to students of insurance and other interested discipline who may wish to carryout further study on this new field.
The research will assist both the federal government and the Nigeria Agricultural Insurance Corporation which are directly involved in the implementation of the scheme as the device better ways of improving their performance. This will also enlighten the various marketing intermediaries on the need to participate more effectively in the operation of the scheme to ensure it success.
Furthermore, since the scheme serve as a kind of protection to the insuring public (i.e the insured farmers) thereby enhancing greater confidence to all farmers (whether insured or not) on adopting a new and improved farming practice and in making greater economy, perhaps aids to increase the state agricultural production.
1.6 SCOPE OF THE STUDY
Nigerian Agricultural Insurance Corporation is the only corporation underwriting all agricultural insurance policies in Nigeria with a network of branches made the study unique. The research work carried out tend to be in a dynamic setting as the scope of the work extend from the head office of the Nigeria Agricultural Insurance Corporation in Abuja to the nearby zonal office here in Enugu. The research work covered agricultural crop insurance product.
1.7. LIMITATIONS OF THE STUDY
The volume of work load required in a research of this nature could not be carried out without some limitations. First, was inadequacy of finance, second was the dearth of books, journal, magazine on agricultural insurance as secondary source of data collection. Thirdly, the illiteracy level of respondents farmers constituted serious handicap and mount loss of vital information relevant to this piece of work.
1.8 DEFINITION OF TERMS
The following terms used in this study should be taken to mean the following: