Gone were the days of the groundnut pyramids in the North, cocoa plantation in the West and the oil palm in the East.
The result of the neglect of the sector is that Nigeria has become a net importer of food spending as much as over N300billion annually.
After decades of lip-service by successive governments to reposition the agricultural sector as the mainstay of Nigerian economy, a new vista of funding option was opened in 2011 by the Central Bank of Nigeria (CBN).
With supports from regional and global agencies, it created the Nigerian Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) as part of the solution to the lingering problem of high cost of bank credit to the agricultural sector.
The initiative, which has become a promising source of funding for the agricultural transformation agenda of the Federal Government, is expected to provide opportunity of low-interest rate credit to over 70 million farmers and other agro-allied investors in their efforts to optimise operations, boost productivity and ensure returns on investments in the hitherto poorly funded sector.
But in spite of this laudable step, the small holder farmer still find it difficult to access credit to improve his output.
Prior to the introduction of NIRSAL, the Apex Bank had started the disbursement of N200billion to boost food production and it would go more to small holders farmers.
According to the Central Bank Governor, Mr. Sanusi Lamido Sanusi, the loans when it would be disbursed, it would be targeted more at small holder farmers. But alas that is not to be!
Mr. Akintunde Adekunle is a fish farmer in Karshi , a suburb of the Federal Capital Territory told FrontiersNews that the conditions for collecting the Loan are stringent as it would difficult for him to get a loan from the designated banks.
“Their conditions are difficult to meet. How much am I using to run this business that they expect me to produce a C of O before I can get the agric loan, he queried,” this even as he added “maybe the banks don’t want to give out the loan.”
But a staff of one of the custodian bank for the agric loan told our correspondent that the banks are not finding it difficult as most of those that come to meet them have proposals that are not ‘bankable’
“Most times, after a careful consideration of most of the proposals cannot be called proposal indeed in the real sense of the word. Some are badly written, while others write their proposals without first of all doing a proper feasibility studies. After all, we have to think of how to get our monies back.”
The disbursement of the Agric money has not been without its little talking point as some have accused banks of deliberately blocking the disbursement.
Interestingly, the Nigerian Agricultural Insurance Corporation (NAIC) has said it was suing major banks in the country over their non-compliance with the Act establishing the corporation for the disbursement of about N133billion of the N200billion Commercial Agric Credit Loan approved three years ago by the federal government towards ensuring food security in the country.
NAIC had argued that it is the sole body recognized by law to disburse agriculture loans in the country.
Also, President, Nigeria Farmers Association, Mr. Abdullahi Adamu has accused commercial banks of frustrating farmers access to the N200 billion loans set aside by the Federal Government to revamp agriculture.
He lamented that farmers have not accessed the facility, many years after it was set aside by the government.
His words: "It is like getting water out of the rock. I don’t think farmers, I mean real farmers who produce food and agricultural products, have accessed that money. Efforts and hopes have been dashed.
"But if it were something like buying and selling, I mean if you want to import some products, banks managers will welcome you. They will serve you tea and give you the money.
"For agriculture, it is not the same story. These are some of the things that are happening. You would see that some of the things that happen on the farm are natural and because they are natural, there is a limit to what farmers can plan for.
FrontiersNews gathered from Mr. Abdilkareem Dapchi, the terms for accessing the facility were “too stringent” for local farmers to meet, considering the condition under which they live.
“The scheme is not meant for the small holder farmer,” he said. “Peasant farmers cannot meet the conditions to enable them access the facility. The conditions set by the banks only favour big farmers who represent small fraction of the farming population. It is desirable for the government to review the conditions to enable more farmers benefit from the facility.”
But Chairman, House committee on Agriculture, Mr. Mohammed Munguno wondered why collateral is being demanded before the disbursement of the loan.
According to him, the situation where farmers are asked to bring collateral before loans are disbursed to them is not favourable to the peasant farmers and unacceptable since the loan is meant to assist them.
“Banks that are supposed to give the loans are asking for collateral, which most of our poor farmers who are mostly into subsistence farming cannot provide. It has become difficult for them to access these funds, so we are looking for ways and means of soft-pedalling so that farmers can access these funds,” he said.
Mr. Monguno said one of the ways of making the funds accessible is to do away with the issue of collateral and allow the Nigerian Agricultural Insurance Corporation to insure the loan or serve as guarantors.
But a financial analyst, Mr. Kenedy Okafor insisted that the way the loan has been structured would only be for big players to access. They are the only ones who have the kind of collaterals that the banks need.
Even when the small farmers have formed cooperatives, they still lack the capacity to get the facility.
He therefore posited that for government’s policy on Agriculture to succeed and reach small holder farmers who constitute over 60 percent of farmers nationwide, commercial banks should be compelled give out the agric loan with the stringent measures that are always associated with granting of loans.
FrontiersNews
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