Despite disruptions in agricultural activities with farmers staying away from farmlands amid the worsening insecurity, agric stakeholders have harped on the imperative of repaying various financial facilities put in place by the Federal Government through its agencies such as the Central Bank of Nigeria (CBN) and NIRSAL Microfinance Bank, as well as various state governments. TAIWO HASSAN writes
Indeed, before the emergence of insecurity in Nigeria, the country’s agricultural sector was having an unhindered government support following President Muhammadu Buhari’s pronouncement that agriculture would become the next money spinner in government’s attempt to boost the country’s non-oil sector and generate substantial revenue following crude oil price crash at the international market in 2014. In particular, President Buhari stated in its maiden presidential speech in 2015, that it was time the country turned to agriculture in a bid to re-jig the fragile economy. To back it up, President Buhari ordered the CBN to set up the Anchor Borrowers’ Programme (ABP) to support Nigerians and local farmers.
Poor state of agric funding
Before the change in agric sector by the President Buhari-led government via incentivised agric loans support system, access to finance was rated by agricultural scientists and farmers as very low, because it was one of the most prominent impediments to small-scale farmers’ operational expansion and productivity. Besides, lack of adequate capital implies a lack of quality inputs such as seedlings, fertiliser, farm equipment, and skilled labour for targeted farmers. No doubt, farmers’ inability to access inputs has been a consistent challenge and cause of concerns as government slowed down investments and commitment in agriculture. In addition, financial institutions considered the sector a high-risk zone predominantly operated by unlettered individuals with no financial and business management skills. However, various funding interventions by government in agriculture have been a ray of hope to restore the past glory of the country.
Insecurity impact on agric sector
However, following the straits caused by insecurity and COVID-19, there were negative signals coming from Nigerian farmers that it would not be possible to repay government’s facilitated loans. Indeed, Nigerian farmers under the umbrella of All Farmers Association of Nigeria (AFAN) had to enter into a plea bargain with the CBN to give its members more time for the payment of intervention funds under the ABP. AFAN’s plea bargain came on the heels of CBN’s directive that beneficiaries, who obtained loans under the ABP, its flagship agricultural intervention funds, should repay their loans so other farmers could benefit from the scheme. In particular, the farmers’ association emphasised that insecurity had forced many of its members to abandon their farms, while others have lost huge profits running into billions of naira to disruption by bandits and cattles being reared by herdsmen. National President of the All Farmers Association of Nigeria (AFAN), Arc. Kabiru Ibrahim, told New Telegraph that the challenges caused by insecurity had forced many farmers under ABP arrangement to default in payments. Ibrahim explained that it was becoming difficult on a daily basis for Nigerian farmers to access their farmlands and that this was seriously affecting their commitments to repay the loans due to drop in revenue. According to him, since many farmers are scared to access their farmlands, they are having very limited products in the market.
Why loans should be repaid
No doubt, the country’s agriculture is experiencing storm in all fronts. But some agric stakeholders believe that loans made available to them have to be paid back for others to benefit. According to them, there is need for change in perception about the loans repayment despite the difficulties caused by insecurity and COVID-19 in the country’s agricultural space. The Nigerian farmers explained that though the participating banks, which work with the CBN, lent to them at nine per cent yearly, there is need for the loan to be repaid with the harvested crops. They identified that the ABP scheme targeted small-scale farmers cultivating fewer than five hectares of land and producing cereals such as rice, maize, and wheat; roots and tubers such as cassava, potatoes, yam, and ginger; tree crops like oil palm, cocoa, and rubber; legumes such as soybean, sesame seed, and cowpea; livestock such as fish, poultry and ruminants. Also included are cotton, sugarcane, and tomato. A former Regional Coordinator of Cassava: Adding Value for Africa (CAVA), Professor Kolawole Adebayo, said through off-taking scheme, small-scale farmers had access to big cassava processors through the CAVA project by linking such farmers to supply chain managers for the purchase of their produce at standardised rates. Professor Adebayo said: “When improved yields are available, some of the farmers had challenges selling their yields because they were not large enough to attract those large buyers. So, we intervened at this stage to help them to access new markets.” The immediate past Minister of Agriculture and Rural Development, Alhaji Mohammed Sabo Nanono, also weighed his support for Nigerian farmers to have a rethink about government’s agric loans repayment, despite the quagmire facing agriculture presently. The agric minister said loan repayment is made easier at harvest, because a farmer is paid the balance after deducting the borrowed capital and the interest, giving no room for defaults. He explained that other benefits of such schemes included group participation and access to cheaper farm mechanisation in terms of mechanised land preparation with plowing, harrowing, and ridging implements; planting with planters and weed control, and crop protection with boom spraying of agrochemicals. AFAN Chairman in Kano State, Abdulrasheed Magaji, said that farmer could not give excuses not to repay loans amid current happenings in the sector. According to him, reasons for loan default emanates from or is technically planned and made possible by those government officials saddled with the responsibilities to manage and execute the processing and disbursement of the loans. He listed factors such as poor disbursements via timing, incomplete packages, inflation of input prices and advancing loans to wrong and undeserving beneficiaries as part of the causes of inability to recoup loans from farmers. According to.him, “I believe if the above could be corrected and taken care of, farmers will definitely repay any loan, especially if procedures of giving out the loans are to be observed. “I can’t say that a hundred per cent repayment can be made, but excellent recovery would be made.”
Though it is clearly very challenging for every farmer at this period, but agric stakeholders are saying repaying the loan will allow others in line get theirs because government has enough resources to satisfy the need of all Nigerian farmers.