Uche Usim, Abuja
The Nigeria Incentive-Based Risk-Sharing System for Agricultural Lending (NIRSAL) has moved to bridge food production shortfall by launching a unique farming model at the Obafemi Awolowo University, Ile-Ife, Osun State.
The model,FAM-SMART, an acronym for Farm Aggregation Model for Smallholder Agriculture based on Technology, is designed to simultaneously empower smallholder farmers and boost agricultural production on a structured and sustainable basis..
It is rules-based, market-led and technology-driven system of primary production agriculture designed by NIRSAL for smallholder farmers, anchored on three principles of aggregation, structured group dynamic and proportionate cost and profit sharing in order to achieve economies of scale, maximum output and maximum profit.
Commenting on the initiative, the Managing Director of NIRSAL, Mr Aliyu Abdulhameed, said the NIRSAL Geo-cooperatives established in different parts of the country will serve as the operational hubs for FAM-SMART. In the immediate to medium term, the corporation plans to set up 16,000 of them.
According to him, a conservative estimate of 1000 geo-cooperatives producing a gross output of 1,250,000 metric tonnes of grain will generate a gross revenue of N125 billion.
“This underscores the immense potential profitability of the FAM-SMART concept”, he said. The NIRSAL boss noted that though NIRSAL has rolled out several FAM-SMART Projects in a number of locations across the country, the Ife project was the first to be launched publicly.
“Based on a projection that between 80 per cent to 90 per cent of a typical per hectare cost of any production is made up of input and services that can be institutionally supplied in a structured business model , enabled by NIRSAL Credit Risk Guarantees and other strategic institutional support, FAM-SMART is an attractive investment opportunity for banks and the entire financial services sector”, he said.
Throwing further light on the FAM-SMART concept, Abdulhameed stated: “This is a new paradigm in agricultural primary production in Nigeria.
The concept and philosophy behind the model, which is what we are launching today, is such that provides a structured production system that is almost entirely driven by technology end to end which makes it attractive to service and input providers and more importantly, rewarding for smallholder farmers.”
He added that NIRSAL’s focus on smallholder farmers was central to the mission of the corporation because they make up the the overwhelming proportion of farmers in the country.
He revealed that so far NIRSAL has trained over 700,000 farmers on good agronomic practices and financial education and provided high quality agricultural inputs and affordable finance to more than 500,000 smallholder farmers under the three (3) farming seasons from 2017 to 2018.
In his remarks at the event, OAU Vice Chancellor, Professor Eyitope Ogunbodede expressed the appreciation of the institution to NIRSAL for initiating the FAM-SMART project in the university.
Recalling the central role that the university played in achieving the agricultural successes of the old Western Region, stated that OAU is both qualified and prepared to maximize the opportunity.
“This opportunity with NIRSAL has provided the opportunity to train our students in the Faculty of Agriculture to acquire practical experience in mechanized agriculture and agribusiness.”
The Vice Chancellor urged NIRSAL to keep its word to expand the project to 1000 hectares because the university has the land available for the purpose.
FAM-SMART will provide comprehensive financing to support farmers by anchoring them with input suppliers, mechanization service providers, market, financial Institutions etc. in order to ease and make production commercially viable.
FAM-SMART will take full advantage of available technologies to minimize the rigours associated with primary production and maximize output.
The new model will also create an enabling environment for supply of inputs and other primary production services on credit arrangement leveraging on NIRSAL’s insurance and CRG facilities as well as provide relevant training for farmers supported under it.