Credit financing and the provision of inputs have been identified as critical to improving agricultural production even as the federal government emphasised the sustenance of policies inherited from previous administrations.
The Vice President, Prof. Yemi Osinbajo and the Minister of Agriculture and Rural Development, Chief Audu Ogbeh, at the launch of the Agricultural sector Roadmap in Abuja, emphasised the need to breed successor farmers by attracting young people through adequate finance.
Prof. Osinbajo disclosed the readiness of the finance ministry, and the Central Bank of Nigeria, through the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending, NIRSAL initiative, to take up the challenge of funding agriculture by giving grants to farmers.
“Financing of agriculture is also a crucial policy. With double digit interest rate at the moment, we must develop some funding options in the short term. The Anchor Borrowers’ Scheme of the CBN has proved to be extremely useful,” Osinbajo noted.
He attributed the “phenomenal success of the Kebbi State rice programme where the farmers move from 3.5MT per hectare to 7.5MT per hectare” to the single digit interest rate extended by the Anchor Borrowers’ Scheme of the CBN used for timely purchase of fertilizer and other inputs.
The policy, tagged Green Alternative, covers all agricultural processes including land use, fertilizer types, appropriate technologies, science and technology, and telecommunications for monitoring movement of tractors in mechanized agriculture.
Prof. Osinbajo disclosed that the ministry of finance has concluded plans to recapitalize and re-engineer the Bank of Agriculture to grant the single digit interest loan before the before the end of this quarter.
Chief Ogbeh explained that the Green Alternative policy of government is retooled as five major strategic thrusts focusing on achieving self sufficiency and sustenance in food security, reduction in import dependence and economic losses; stimulating agro-exports for foreign exchange and enhancing wealth and job creation for the teeming youths.
The ultimate objective however is the need to achieve the much desired diversification of the economy where the nation depends less on oil as sole income earnings.
The policy is structured on three pillars; Productivity Enhancements, Crowding in Private Sector Investment and Institutional strengthening and Realignment of the Federal Ministry of Agriculture in partnership with its parastatals and agencies.
Chief Ogbeh highlighted the intention of the government to achieve a quick wins under these pillars towards growing the sector annually between 6-12 per cent, doubling agricultural household incomes in 6-12 years.
Explaining further on the constraints of poor agric lending, the Minister said, “Credit for agriculture is a major constraint, and credit facility currently put 28-30 percent can survive unless the person is into crime. Apart from the interventions of NIRSAL and CBN today, we would have not made any headway. We are making headway in the North-West and the South East”.
Nigeria Incentive-Based Risk Sharing System for Agricultural Lending, NIRSAL, is an initiative of the CBN, the Bankers Committee and the Federal Ministry of Agriculture and Rural Development.
NIRSAL essentially administers a Risk Sharing Fund designed to identify, redefine, measure, re-price, and evolve strategies to de-risk and catalyse lending to the Nigerian agriculture value chain.
NIRSAL promotes economic development by acting as a catalyst for credit flows to agricultural value chains by systematically addressing key failures in agribusiness supply chains.
From inception in 2012, 454 projects valued at N61.161 billion have been guaranteed by NIRSAL. Specifically, the sum of N753.36 million was paid out as interest rebate to borrowers who repaid promptly to encourage good repayment behaviour thereby minimising default.

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