The Federal Government and the Central Bank of Nigeria have launched the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) initiative to provide N60billion of loans for agro-dealers at nine per cent interest rate.
The Permanent secretary, Federal Ministry of Agriculture and Rural Development, Mrs. Ibukun Odusote, at a Stakeholders meeting of Southern States on the commencement of the implementation of Growth Enhancement Support (GES) Scheme, said the loans will allow the small scale input retailers to have access to finance to stock up on seeds and fertilisers.
She added that President Goodluck Jonathan has approved N15 billion to recapitalise the Bank of Agriculture at less than 10 per cent interest rate for farmers and agribusiness.
Odusote said the GES scheme is a major milestone in the federal government attempt to modernise agriculture and ensure that Nigeria farmers benefit from the subsidised fertilisers, seeds and tractors.
She hinted that with the scheme, the ministry plans to register an additional five million farmers with the aim of reaching them directly with farm inputs such as seeds, fertilisers and credits.
According to her, the ministry is deploying the use of Optical Mark Reading (OMR) Forms commonly used for major examinations such as WAEC, NECO and JAMB to enable information to be quickly scanned and migrated to the Federal Ministry of Agriculture's Farmers' Registration Database, adding that "each of these OMR forms is Local Government and Ward Specific."
She also said: “We are working hard to ensure that farmers and agro-dealers have access to affordable financing which informed the partnership between the ministry and the CBN to launch the NIRSAL initiative, which will reduce the risk of lending by banks to agro-dealers and farmers.
“As you are all aware indirect targeting of farmers made it easy to divert funds because subsidised seeds, fertilisers and other equipment are diverted to open market and illegally sold at huge profits. As a result, tens of billions of naira were spent every year to reach farmers with agricultural inputs but the level of utilisation of improved seed and fertilisers remained low.
“To ensure that only genuine farmers got the subsidised seeds and fertilisers, we put in place the first ever database of farmers in the history of Nigeria. In 2012, we started with the registration of 4.2 million farmers and will increase this year with 5 million farmers” the permanent secretary said
According to her, within 120 days of the launch of the GES, over 1.2 million farmers successfully redeemed their seeds and fertilisers using the electronic wallet system.
Earlier in his welcome address, the Oyo State Commissioner of Agriculture and Rural Development, Mr. Peter Odetomi, noted that no fewer than 76,082 farmers were validated out of 78,000 farmers that registered for the GES scheme, adding that there were 44 redemption centres and only 16,466 farmers benefited from the system as a result of initial problems encountered on e-wallet operations and delays in supplies of agro-inputs to Agro-Dealers.