By Ibrahim Mohammed
Agriculture in Nigeria has greatly improved in the past few years because of the increased adoption of improved agricultural technologies, public private partnership and the heightened demand for locally produced agricultural products. Initially, most Nigerian farmers merely engaged in subsistence farming to provide food for their family while very little is made available in the market.
Growth in agricultural output has no doubt been on the rise as farmers are gradually moving away from subsistence agriculture and embracing modern agribusiness with significant improvement across the entire value chain of production, processing, storage and marketing. This is why in every nook and cranny of the country, especially the countryside, one encounters all sorts of farm produce on display by the roadside. From small ruminants to large animals, food and cash crops as well as fish, fresh yoghurt and honey are constantly being marketed by roadside hawkers to commuters and motorists plying the roads that a routine stop over for a cheap bargain.
The Nigerian soil and climate conditions are very suitable for the production of wide varieties of cash and food crops. There are over a hundred different food crops produced by farmers in Nigeria on yearly basis. These include yam, maize, millet, sorghum, beans, potatoes, rice, onions garbage, carrot, pear, cocoa, oranges, sesame, cocoyam, okra, vegetables and very many others. The lush vegetation, underground and surface water bodies and temperate climate are equally suitable for livestock production and fisheries development.
It would be recalled that the agricultural sector at one time used to be Nigeria’s economic mainstay until the discovery of oil in the 50’s. However, with the dwindling resources as a result of the sudden drop in international oil prices, there is no gainsaying the fact that agriculture must retake its rightful place as every part of the country is endowed with one agric produce or the other.
The most debilitating challenges farmers face at the moment include poor access to agric input supplies like fertilizers, pesticides, tractors and accessories and microfinance as well extension services. Decades ago, the Federal Ministry of Agriculture and Rural development, River Basins Authorities, State Agric Development Projects (ADPs), Agric Research Institutes, International Fund for Agricultural Development (IFAD) and other development partners adequately provided enough incentives to farmers.
It is regrettable to note that the drudgery associated with agriculture due to the near absence of the above incentives made the oldest profession less attractive to the youths, thus leaving the aged to continue to till the land.
It is instructive to note that agricultural lending has always been the bane of agricultural development in Nigeria. In the recent past, briefcase farmers were the major beneficiaries of most government policies instead of the practising farmers. The defunct NACB which is now Bank of Agriculture was known to have extended loan facilities to such briefcase farmers who till now were unable to repay the loans. Some of the commercial banks with dedicated agricultural departments also extended similar loans to politically-exposed persons who defaulted in repayment.
It is however gratifying to note that in its quest to ensure the revival of Nigeria’s agricultural sector through agricultural credit guarantee, the Central Bank of Nigeria in conjunction with the Bankers Committee and the Federal Ministry of Agriculture & Rural Development initiated a scheme called the Nigeria Incentive Based Risk Sharing System for Agricultural Lending (NIRSAL) to support commercial financing of end to end agricultural value chains through a project management approach that emphasizes value for money, leverage, commercial viability and self sustainability. It covers all crops, livestock, fishery and poultry projects in Nigeria and it has a special bias for youth entrepreneurship in agribusiness along the entire value chain. NIRSAL, a $500 Million (N100 billion) public private initiative (wholly owned by the Central bank of Nigeria) was incorporated as a Public Limited Liability Company and licensed as a Non-Bank Financial Institution with the primary mandate of facilitating the flow of credit to agribusiness value chain players and collaborating with stakeholders to fix broken agricultural value chains in Nigeria.
This remarkable act of the CBN has rekindled the hope of Nigerian farmers and all agricultural value chain actors including input suppliers, primary producers/farmers, value-added processors of agricultural raw materials, marketers and distributors of agricultural commodities.
As a flexible financing tool designed to change the behaviour of financial institutions towards agricultural lending, NIRSAL is meant to cover all crops and livestock activities in Nigeria, while driving improved investment outcomes and job creation. It is an all purpose vehicle that will establish the much needed linkages between the financial system and the agricultural production/value chain system capable of engendering the much desired growth, transformation and sustainability of the rural economy and indeed that of the nation.
The company is expected to fix the broken agricultural value chain in order to provide a veritable platform for de-risking agricultural lending, mobilize financing for Nigerian agribusinesses by using credit guarantees to address the risk of default, provide technical assistance through capacity building across the value chains to enhance productivity, reduce the cost of borrowing, diversify the economy from oil to agriculture in the light of the current decline in oil revenue and enhance the Internally Generated Revenue sources for states through export of agricultural products.
The company essentially administers a risk sharing fund designed to identify, redefine, measure, re-price and evolve strategies to de-risk and catalyze lending to the Nigerian agriculture value chain. Its primary goal is to serve the Nigerian smallholder farmer and all other value chain players through the provision of incentives to rapidly raise agricultural productivity, promote social equality, improve incomes of farmers through better links to agricultural markets, create jobs and secure food supply for global competitiveness.
•Mohammed writes from Abuja