AFFLICTED by food shortages, rising insecurity, and soaring unemployment, the reported pause in the disbursement of low interest credit to farmers under the Anchor Borrowers’ Programme portends more hardship for Nigerians. Inaugurated by the Central Bank of Nigeria in 2015 as a novel interventionist scheme to boost food production and encourage farmers, its suspension since 2021 according to producers, might erode recent gains in agricultural production and worsen the national poverty crisis. The Federal Government, the ABP’s main backer, and the CBN should take urgent steps to fine-tune and resume the programme.
At a special forum in Abuja recently, leaders of 68 agricultural commodity associations deplored the stoppage of disbursements under the ABP since 2021 and appealed to the President, Major General Muhammadu Buhari (retd.), and the CBN to reactivate it “to avert an impending threat to national food security.”
Initiated under the preceding Goodluck Jonathan administration, Buhari formally launched the ABP in November 2015. Its broad objectives according to the CBN are four-fold; increase banks’ financing to agriculture, reduce the national food import bill, create a new generation of innovative and “smart” farmers, and deepen financial inclusion, moving smallholders from subsistence to commercial farming.
With smallholder, and medium to large scale farmers across the country as its target beneficiaries, the targeted commodities include cereals, roots and tubers, cotton, sugarcane, legumes, tomato, livestock, and any other added along the way by the CBN. About 23 crops are said to have benefitted from its low interest credit disbursed through deposit money banks, development finance institutions, microfinance banks, and non-interest banks.
Its promoters enthuse, and farmers’ groups concur, that it has been fairly successful in boosting agricultural production. Its major success is in rice production where Nigeria is headed towards self-sufficiency.
By December 2021, over 4.8 million farmers had benefitted from ABP loans with over N1 trillion disbursed across the country, and supporting 23 commodities through the intervention.
The ABP is particularly credited with driving Nigeria’s rice ‘revolution.’ From a costly rice import-dependency that was draining over $2 billion in foreign reserves annually, domestic production of rice rose from 3.94 million metric tons in 2015 to almost 9.0 million MT by 2021. The number of rice mills rose from only six in 2015 to over 50 by 2021. The Thai Rice Exporters Association lamented the drop from the 1.3 million MT of rice its members exported to Nigeria in 2014, to 58,000MT tons in 2016 and just 2,160MT in 2021.
But problems have set in. One is the low repayment rate of loans. Out of the approximately N1 trillion granted under the ABP, CBN has recovered only N400 billion, leaving about N600 billion outstanding. Some farmers see the loans as gifts. Such defaulters threaten its sustenance.
Not surprisingly for a country neck-deep in corruption and cronyism, non-farmers have reportedly infiltrated the scheme, taken its loans and disappeared. The National Vice-President, Maize Farmers Association of Nigeria, Muazu Iliyasu, confirmed abuses when he addressed the association’s 12,562 members in Adamawa State in 2021. He said, “Most farmers think this (ABP) is part of the ‘national cake.’ But we are emphasising that it is a loan which must be repaid.”
The Chairman, Forum of Agricultural Commodity Associations’ Presidents, Sadiq Daware, also blamed floods that have been deluging farms for some time, escalating this year when 33 states were affected by flooding.
Insecurity has also taken its toll. Across the North, farming has become risky. Bandits, Islamic terrorists, and kidnapping gangs operate across large tracts of territory and torment entire local government areas. They disrupt farming, seize produce and impose heavy levies on farmers and communities. The highways and markets are also unsafe, making farming, harvesting, storage and transporting of produce unprofitable. Farmers lament that bandits, Fulani herdsmen, and Islamic terrorists force them out of the farms, and unleash their cattle to destroy their crops, leaving them with nothing to harvest. The Southern states also experience widespread insecurity.
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Additionally, politics and sectionalism have allegedly crept into ABP’s loan disbursement decisions. The CBN must address these concerns.
The authorities must find ways to resolve every other problem and resume the ABP. Repayment of loans should never be compromised. Previous interventionist revolving loan funds provided by the Federal Government and the CBN have almost all failed due to corruption, politics, and cronyism; but most especially, by the inability to recover loans.
In September, the CBN through NISRAL Microfinance Bank publicly named the biggest loan defaulters. This is not enough. There should be more stringent, effective measures to recover credit from recalcitrant debtors.
The Federal Government should also make greater effort to secure the country and make it safe for farming, commerce and social activities. A new alert by the IMF urging the country to prepare for heightened food crisis in 2023 due to floods and inflationary pressure on fertiliser prices should galvanize the government to explore all avenues to increasing food production, including the ABP.
The ABP represents a hedge against food insecurity. The Federal Government should therefore adopt stricter measures to end the raging insecurity crisis across the country. Proactive action should also be taken to prevent a recurrence of the 2022 floods. The various farmers’ groups should intensify their sensitisation to impress the non-negotiability of repaying loans on their members.
Urgently, the government must allow states to share in law enforcement duties through the establishment of state police that would complement the federal police and other national security agencies to check the national crime wave.
The CBN should make strong efforts to sustain the programme, including rigorous awareness campaigns among the beneficiaries. It should fully involve the private sector to review the programme and set it on a firmer footing. It should never compromise on loan repayment.
Private sector co-option is effectively applied in India and Malaysia where “contract farming” is revolutionising agriculture in those countries. The concept is effectively coordinated and identified loopholes blocked from inception.
Imbibing such adaptability, the CBN should not allow the ABP to die.
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