Business

CBN loans: Ensuring accessibility for genuine farmers

Following recent pronouncement by the Central Bank of Nigeria (CBN) for integration of non-interest credit facilities into the Anchor Borrowers’ Programme (ABP), the Targeted Credit Facility (TCF) and other agricultural credit schemes, the All Farmers Association of Nigeria (AFAN) and other agric stakeholders have demanded that the window be exclusively opened to genuine farmers through their associations. TAIWO HASSAN reports

The apex bank’s intervention in the country’s agric sector via credits has been described as a game changer for Nigeria’s economy in many fora because of the way it has turned around the sector.
Under the ABP programme, the apex bank had set-aside N40 billion out of the N220 billion Micro, Small and Medium Enterprise Development Fund (MSMEF) given to Nigerian farmers at single digit interest rate of maximum nine per cent per annum in 2015 as part of efforts to boost rice production and also make Nigeria a net exporter.
Till date, in Nigeria’s history, the move by the apex bank is described as a revolution that has seen other African countries coming to understudy the CBN’s model.
In fact, the intervention has empowered local farmers and also attracted blue chip companies to invest in rice production and other commodities in agric value chains.
However, despite its success, findings have shown that these intervention funds set-aside for agriculture are being hijacked by some politicians in various states who are allegedly diverting the funds to other purposes, thus depriving genuine farmers access to the loans meant to promote food sustainability in the country.

New order
Following the controversy surrounding the disbursement of the CBN agric credit in the country, the Nigerian farmers have warned that henceforth, impostors, politicians and charlatans should be prevented from hijacking the scheme meant for real farmers to boost food production and reduce poverty amid the COVID-19.
Speaking with New Telegraph, the Chairman of AFAN, Lagos chapter, Dr. Femi Oke, explained that with the new scenario whereby CBN has chosen agriculture and manufacturing as the two sectors for economic rebirth post-COVID-19, the association will ensure that real farmers are protected in order to ensure that they get the CBN loans.
Oke pointed out that the genuine farmers deserved to be rewarded via the credit schemes to boost their investment and ensure food production in post-COVID-19.
He noted that political farmers were the bane of Nigeria’s agric sector’s growth because they do not have agriculture at hearts.
Similarly, a cassava value chain agronomy specialist with the International Institute of Tropical Agriculture (IITA), Dr. Richardson Okechukwu, said it was an “excellent way to facilitate agricultural enterprises that have for long been neglected.”
He added that government should ensure recipients were linked to off-takers and utilise improved seeds of good varieties along with quality inputs, saying that mechanisation was also important to agriculture post-COVID-19.
“A shift from hoe and cutlass is long overdue. This intervention, if handled well, will create jobs and reverse rural urban migration. Beneficiary farmers should endeavour to repay their loans, which, luckily, are interest-free, to ensure the facility is extended to other farmers,” he noted.

Achieving 10mmt food production
Besides, the apex bank and other stakeholders recently launched an initiative to mitigate the impact of COVID-19 on food production in the country, increase production by about 10 million metric tonnes within a year. The joint venture, in partnership with the private sector through some out-growing schemes, involves farmers and off-takers to ensure value chain development of the crops, boost farmers’ income through access to improved inputs.
While reacting to the scheme, the Project Manager, IITA, BASICS-II and a former Deputy Vice Chancellor of the Federal University of Agriculture, Abeokuta (FUNAAB), Prof. Lateef Sanni, said it was a laudable programme that has potential of helping over two million farmers between July 2020 and October 2021 in the first instance, and may snowball into helping over five million farmers from 2021 onward.
Sanni added that the non-interest facility would remove the aspect of five to nine per cent of economics of production from the fund to be loaned to farmers by CBN. If farmers have access to quality seeds, agricultural inputs like herbicide and fertilizer and apply good agricultural practices, he said, there is assurance that such farmers would get double yield of cassava, maize and rice harvest.

CBN’s position
The apex bank had disclosed that the job and food increase expected from the scheme would be achieved through zero-interest inputs financing options such as fertilizer, seeds, seedlings, pesticides and other farm inputs in the 36 states of the federation and the Federal Capital Territory.
It would run for one year and about two million hectares of land would be cultivated. It will involve crop and animal production, and each farmer would cultivate one hectare.
“The priority crops and livestock targeted by AFJP for local market are rice, maize, sorghum, groundnuts, cowpea, cassava, millet, livestock, palm kernel and cotton, while sesame seeds, hibiscus, cocoa, hides and skin; horns and hoofs are targeted for export market,’’ a statement from CBN said.

Recently, CBN Governor, Godwin Emefiele, said during a review session on the ABP, and the strategies for the 2020 agricultural wet season that the creation of a non-interest window was a result of appeals from stakeholders for farmers across the country to also be considered for funding under the non-interest facilities.

Zero-interest scheme comments
A former Regional Coordinator of the Bill and Melinda Gates Foundation-sponsored Cassava: Adding Value for Africa (CAVA), Professor Kolawole Adebayo, expressed satisfaction about the zero-interest scheme of CBN on agric credit, saying “if implemented to achieve the stated objective, it will be great. The impact on the Nigerian food systems will be immense. I truly hope that all the ancillary requirements to ensure that farmers make the best use of the fund will also be concurrently addressed.”
In his own submission, the Deputy Chairman, AFAN, Lagos chapter, and Chairman, RiFAN Lagos chapter, Shakin Agbayewa, said the scheme was a welcome development for Nigerian farmers as it will boost food production and reduce food prices.
He explained that the association had been very grateful to CBN for changing the way Nigerian agriculture is presently, affirming that the decision to ban foreign rice’s entry into the country was the best ever decision taken by the present government following CBN’s ABP approval for local rice development.
According to him, “if it is properly channeled, it will encourage the smallholder farmers to stay on the farm. They will feel the sense of belonging as their operations are recognised as important.”
For Regional Coordinator, Africa Rice Centre, IITA, Ibadan, Dr. Francis Nwilene, the non-interest window facility will definitely help the smallholder farmers to boost agricultural productivity and the GDP of the country. The focus of the facility should be on the intended beneficiaries who are farmers in the rural communities (use of GPS to map the farm location and size of the farmers). The apex bank needs a simplified loan application format that can be easily completed (business or cooperative registration & plan, BVN, etc) by the farmers. It is well known that majority of the farmers have lost their seed stock or eaten all harvested grains during the COVID-19 period. The interest-free agric loan is seen as a government incentive to support farmers to produce more to cope with the increasing demand for food due to restrictions on movement of people.

Last line
With the new credit facility in place, there is no more excuse for farmers and genuine stakeholders in agric sector not to engage themselves in more productive ventures despite the risk posed by political farmers.

 

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