New Telegraph

ABP: Boosting Nigeria’s quest for rice, self-sufficiency

The growing number of rice pyramid projects across the country validates the achievements of the Central Bank of Nigeria’s (CBN) Anchor Borrowers’ Programme (ABP), writes Tony Chukwunyem

Minna pyramids

At the national flag-off of the 2020/2021 dry season rice farming in Minna, Niger State, in December 2020, which was jointly organised by the Central Bank of Nigeria (CBN ) and the Rice Farmers Association of Nigeria (RIFAN), during which four massive rice pyramids were displayed, Governor of the apex bank, Mr. Godwin Emefiele, attributed the impressive strides that the country has made in the production of rice and other agricultural crops in recent years to the regulator’s Anchor Borrowers’ Programme (ABP) – the intervention scheme that enabled the rice pyramids. Emefiele, represented by the Deputy Governor, Corporate Services, at CBN, Mr. Edward Adamu, said the programme had revolutionised agricultural credit financing and remained the fulcrum of transformation initiatives in the sector. He noted that since the launch of the ABP by President Muhammadu Buhari in 2015, rice had remained the focal crop under the programme given its crucial role in the diet of average Nigerians. He stressed that with a population of about 200 million, importation of any major food item would continually drain Nigeria’ external reserves, export jobs to countries where these food items are produced and distort the commodity value chains as the nation will not be able to guarantee the supply of raw materials for its agro-allied companies.

Ekiti pyramids

Similarly, at the unveiling of the first rice pyramid in the South- West in Ado-Ekiti, in May, last year, Emefiele described ABP as a game changer for financing smallholder farmers. Noting that the programme will ultimately help in achieving some of the goals of the Federal Government’s Economic Sustainability Plan (ESP), he disclosed that the implementation of ABP since its inception in November 2015 had led to significant improvements in agricultural outputs as well as increase in incomes in the nation’s rural communities. The CBN governor said: “From inception till date, we have financed 3,107,890 farmers for the cultivation of 3,801,397 hectares across 21 commodities through 23 participating financial institutions in the 36 states of the Federation and the Federal Capital Territory (FCT). “The achievements recorded have also helped to show that Nigeria can indeed achieve selfsufficiency in the production of staple food items within the shortest possible time. The positive impact of the Anchor Borrowers’ Programme can be seen in all our agrarian communities as it has brought hope to the farming population through the timely delivery of agricultural inputs and the provision of a guaranteed market for their outputs at a market determined price. The ABP has been able to support some of our macro-economic objectives by enabling more employment opportunities, driving financial inclusion and improving access to finance in our rural communities.” Continuing, he said: “Under the 2020 wet season Rice Farmers Association of Nigeria (RIFAN) – CBN partnership, we financed 221,450 farmers for the cultivation of 221,450 hectares in 32 states. The pyramids being unveiled today are part of the harvest from the various fields from the South-West and other neighbouring states to demonstrate the spread of the movement and provide evidences that rice production is viable in all states of the federation. “Beyond RIFAN, we have also supported a number of prime/ private anchors. Omoluabi Farms (Ekiti), Time Sellers (Ogun), Truechem (Ogun), Wems Agro (Ondo) and many more awaiting disbursements for the 2021 wet season.” The CBN governor, who noted that the implementation of ABP, like any other smallholder financing programme, had faced a lot of challenges, such as prolonged poor productivity per hectare, poor adoption of modern agronomic practices, lack of adequate mechanisation support services, post-harvest losses, among others, however, said the apex bank and its partners had continuously improved on their learning experiences and, “now have a clear line of sight that these challenges are surmountable with proper planning, timely execution of plans and synergy among all stakeholders.” According to him, “we have added several layers of control to improve on transparency and accountability among all stakeholders and what you are witnessing today is a demonstration of our growth and a strong indication of the enormous potential in the country’s agricultural space. It is important to note that we are still a far cry away from achieving our desired objective, but the growth process reaffirms our belief in the potential inherent in our agricultural sector.”

Revised guidelines

Analysts point out that it was in its bid to ensure effective implementation of ABP that CBN, in November last year, released revised guidelines on the programme. According to the regulator, “the guidelines recognise the distinctiveness of smallholder farmers, the ABP transactions dynamics and the Project Management Team (PMT) in the implementation process. It also adopts measures to ensure the protection of smallholder farmers. It defines eligibility criteria and responsibilities of relevant stakeholders under the programme such as the loan limit, interest rate, tenor; agricultural commodities eligible for financing under the programme. It outlines the implementation windows and operating models under each window type. “This document is, therefore, aimed at improving the programme’s implementation process and enhancing stakeholders’ participation for the realisation of the ABP’s objective.” Highlights of the new guidelines include infractions and sanctions for defaulting farmers and participating financial institutions, loan repayment terms, collateral requirements and eligibility criteria. On repayment terms, for instance, the document stated: “Repayment shall be by produce and/ or cash as may be prescribed by CBN. The loans granted under the programme shall be fully repaid within the tenor of the facility. Where the facility was accessed through a commodity association, the leadership of the association shall be responsible for full repayment of facility granted to its members.” Also, on eligibility criteria, the guidelines states that “smallholder farmer shall be a member of a farmer group, have a bank account with the PFI, provide a valid Bank Verification Number (BVN), not be a defaulting borrower; have a validated farmland; provide 10 per cent minimum equity contribution and should not participate under multiple associations in one cropping season. Analysts note that while prior to the introduction of ABP, Nigeria used to be the biggest importer of rice from countries such as Thailand and India, the programme has resulted in the nation’s rice import quantity declining by 3.7 million metric tonnes.

Abuja pyramids

In fact, confirming reports on Sunday that President Buhari would, on Tuesday (yesterday) unveil mega rice pyramids in Abuja, a source at the apex bank stated: “From an average yield of 1.5 million metric tonnes in the pre-ABP era, the initiative has increased the average yield per hectare for rice paddy and maize to 4.0million metric tonnes. Also, the average capacity utilisation per annum of domestic integrated rice mills has jumped to 98.2 per cent, from the 30 per cent that was the case in the era preceding the advent of ABP.” The source further said: “Chroniclers of our agricultural history note the 95 per cent reduction in the country’s rice import bill, from a monstrous $1.05 billion prior to November 2015, to the current figure of $18.50 million, annually. What’s more? The Anchor Borrowers’ Programme has created an estimated 12.3 million direct and indirect jobs across the different value chains and food belts of the country. “Despite the challenges posed by insecurity, flooding during the wet season and the dreaded corona virus pandemic in 2020 and 2021, the CBN, working with some state governments and key stakeholders in the rice value chain, inspired rice farmers to cultivate the land to bring forth harvests heaped as pyramids dotting the skylines on some cities in different parts of the country. “Beginning from Minna, Niger State, in December 2020, to Zauro, Kebbi State, and the Gombe State capital, in March 2021, and then to Ado-Ekiti, in May 2021, the views were the same – the goal of food self-sufficiency and job creation, particularly for Nigeria’s teeming youth population, is achievable when all hands are on the plough.” The source added: “The mega pyramids standing tall in the Abuja skyline are pointers to the success stories of the Anchor Borrowers’ Programme. Indeed, we can confidently say that the thrusts of the ABP, which include conserving the country’s foreign reserves, facilitating the resuscitation of domestic industries, reducing the prices of food and improvement in employment generation as well as wealth creation in Nigeria, are being met. “The revolution that began in 2015 is one that must be sustained if we must successfully diversify our economy, earn revenue and achieve the national goal of producing what we eat; and eating what we produce.”

Conclusion

However, the consensus in financial circles at the weekend was that while the rice pyramids in different parts of the country are an indication that ABP is boosting agricultural productivity, some of the challenges that the beneficiaries of the programme are facing, such as insecurity and antiquated infrastructure, are issues that are primarily the responsibility of the fiscal authorities.

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