Prior to the establishment of NAIC, Nigerian farmers suffered various losses on their investment and had no means of going back to production. The frustration made them to move into cities in droves in search of easy means of livelihood. This situation led to depletion of farming populace, which was a serious threat to food security. The Federal Government was disturbed by the ugly trend, hence the establishment of NAIC to address the need of farmers.
The need for a specialized Agricultural Insurance Company to provide insurance cover to farmers was informed by Government's concern over the vacuum created due to the unwillingness of conventional Insurers to accept Agricultural risks, which they considered too risky.
This led to the establishment of the Nigerian Agricultural Insurance Scheme on 15th of November, 1987.The implementation of the Scheme was initially vested in the Nigerian Agricultural Insurance Company Limited, which was later incorporated in June, 1988 but later turned into a Corporation in 1993 by the enabling Act 37 of 1993.
Nigerian Agricultural Insurance Corporation is therefore a wholly-owned Federal Government of Nigeria insurance company set up specifically to provide Agricultural risks insurance cover to Nigerian farmers