With over 2.5 million jobs created directly and indirectly through the Anchor Borrowers’ Programme, ABP, the agricultural sector in Nigeria is currently witnessing a turnaround. From rice to wheat farmers and most recently, cotton farmers, the scheme midwifed by the Central Bank of Nigeria (CBN) with the aim of bringing about grassroots development to the agricultural sector has indeed recorded some achievements. BABAJIDE OKEOWO in this report takes a look at the stride recorded by the scheme and how the antics of a few farmers are threatening the scheme.
On November 17, 2015, President Muhammadu Buhari launched the ABP intended to create a linkage between anchor companies involved in the processing and smallholder farmers, SHFs, of the required key agricultural commodities. During the launch of the scheme, Buhari expressed confidence that the scheme would lift thousands of small farmers out of poverty and generate millions of jobs for unemployed Nigerians. He had also frowned at the huge amount of money spent by Nigeria on the importation of food items that could be produced locally, stressing that Nigeria’s N1 trillion importation bill at the time was not sustainable.
According to the Central Bank of Nigeria, CBN who initiated the scheme, the thrust of the ABP was the provision of farm inputs in kind and cash in the form of a loan (for farm labour) to smallholder farmers to boost production of commodities, stabilize inputs supply to agro-processors and address the country’s negative balance of payments on food. At harvest, the SHF supplies his/her produce to the agro-processor (Anchor) who pays the cash equivalent to the farmer’s account.
The apex bank set aside a portion of the N220billion Micro, Small and Medium Enterprises Development Fund to finance agricultural projects at a single-digit interest rate of nine percent. The loan was targeted at smallholder farmers engaged in the production of identified commodities across the country.
In order to be eligible for the loan, the farmers are required to be in groups/cooperative(s) of between 5 and 20 for the ease of administration.
The result was monumental. Prior to introduction of the ABP, allocation of foreign exchange for the importation of items such as rice, wheat, milk, tomato, fish, cotton and fertilizer among others, had contributed greatly to the depletion of the nation’s foreign reserves, especially in the face of low oil revenue resulting from falling oil prices. The implication was rising unemployment and escalating food imports.
With the ABP in place, the doors of job creation on a massive scale were opened and the country witnessed an improvement in local food production, thereby, conserving an already depleted foreign reserve.
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At the last count, 250,000 smallholder farmers from 29 states of the federation are already benefiting from the N55 billion released through the CBN and 13 participating financial institutions to fund the programme.
As of October 2018, 2.5 million direct and indirect jobs had been created through the implementation of the ABS according to President Buhari. A total number of 862,069 farmers cultivating about 835,239 hectares of land, cultivating 16 different commodities including Rice, Wheat, Maize, Cotton, soya-beans, Poultry, Cassava and Groundnuts, tomato, in addition to fish farming had already benefited from the programme. The initiatives were undertaken in close collaboration with the states.
Another major achievement of the scheme is that the country has been able to cut down on the importation of fertilizer. Eleven blending plants with a capacity of 2.1 million metric tons have been reactivated. “We have saved $150 million in foreign exchange and N60 billion in subsidy. Fertilizer prices have dropped from N13, 000 per 50Kg bag to N5, 500,” President Buhari had disclosed while pointing to some of the achievements of the ABP.
The success story of the ABP in some states is glaring. Take for instance, Kebbi State where the scheme has recorded an achievement that has surpassed the one million tonnes of rice production target in the second year of introduction. This was as a result of many people including civil servants, women, and youths who went back to the farms and engaged in rice production.
Another major achievement was the springing of private rice mills in the state, paving the way for more investment flow. Both big and mini rice mills have been established in the state all owned by private investors. The state can boast of two large modern rice mills now, the Labana Rice Mills and Wacot. This is apart from many mini rice mills being established by private individual farmers across the state. It will be recalled that the state witnessed the commissioning of Labana Rice Mills Limited by the Minister of Agriculture and Rural Development, Audu Ogbeh. The rice mill provides high-quality parboiled rice for not only Kebbi but Nigerian populace. It was specially designed with sophisticated machinery from Switzerland.
Farmers, who are the direct beneficiaries of the scheme have also been singing to the high heavens, the achievement of the scheme.
According to The Ebonyi State Chairman of Farmers Co-operative Society, Mr. Godwin Aka who was a signatory to the procurement of the loan scheme for government in 2016 the rice farmers, millers and rice distributors in the state since 2016 have been counting their gains and could not have wished for a better programme.
Aka who commended the Federal government for the ban on importation of foreign rice said that apart from the enhanced patronage of local rice, which had boosted the economic status of rice farmers, the price of the product has stabilised and might even fall drastically due to massive production in the state.
According to him, since the commencement of the scheme and the sincerity of purpose on the part of the state government and the Central Bank of Nigeria, there has been tremendous improvement in the production of rice and other commodities in the state. Apart from rice production, many farmers have ventured into cassava cultivation, yam, palm seedlings and even livestock.
The scheme, in no small measure, has prompted the stability of the price of rice in the state without fluctuating. There is no gainsaying it that the ban on importation of foreign rice into the country has also provoked an increase in the consumption of local rice, thereby triggering massive production.
A visit to the Abakaliki Rice Mill will convince anyone that both the rich and the poor now testify to the natural taste of the locally produced rice. Before now, consumption of foreign rice is seen as a luxury, even those who cannot afford it go as far as borrowing to buy foreign rice but today the Federal government initiative with the encouragement of the CBN loan scheme has changed the narrative. The increased patronage has made farmers to produce more rice.
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On his part, the Chairman of Ebonyi State Rice Farmers Association, Mr. Uchenna Mbam said that the state government met the target of producing 350,000 tonnes of rice, which it set for the 2016 farming season adding that in 2017 and 2018, 500, 000 tonnes of rice are projected.
He stated that the state was able to achieve that feat because the state government invested massively in rice production in 2016, 2017 and in 2018 farming season. The Chairman Rice Farmers further pointed out that the government’s determination to revolutionise rice production in the state was because of its comparative advantage over other states in the area of rice farming adding that efforts were underway to ensure that Ebonyi reclaimed its position as the highest rice producing state in West Africa.
Non-repayment of loan threatens scheme- Stakeholders
For every good thing, there is always a wrong twist. The ABP has been fraught with instances of non-repayment of the loan, diversion of inputs, side selling, and other issues. Some of the farmers see the loan as their share of the national cake.
The state chairman of the Rice Farmers Association of Nigeria (RIFAN), Niger State, Alhaji Idris Abini, in an earlier interview had decried the attitude of farmers towards repayment. While decrying the attitude of some farmers in the repayment of loans, he expressed concern that if the loans were not paid immediately after harvest, others would not be able to benefit from the scheme.
He said only N20 million had been recovered from the beneficiaries of 2018 programme thereby inhibiting the programme.
Similarly, the Central Bank of Nigeria (CBN)’s representative, Hajiya Hassana Mohammed, in her remarks urged beneficiaries to repay the loans and should not see it as a national cake.
A few days ago, one of the Participating Financial Institutions, Zenith Bank Plc expressed dissatisfaction over farmers’ attitude toward repayment of loans obtained through the scheme Anchor Borrower Scheme.
Mr. Oluwaseun Arigbade, the Regional Agric Finance Officer of the bank at a programme tagged: “agricultural training for banking professionals of financial service providers” recently in Abuja said that the scheme had not been a huge success because of the bad attitude of loan repayment by farmers.
The programme was organised by the GIZ Competitive African Rice Initiative (CARI) with focus on the rice sector in Nigeria.
“The experience we have with farmers is bad, they don’t want to repay their loans because they feel it is the government’s money and it is free.’’
He said that banks often denied funding production because of the risk involved in such ventures, adding that they would rather fund the processing instead of production.
It is hoped that the action of few will not go a long way in curtailing a laudable scheme.