James Emejo in Abuja
The Nigeria Incentive-Based Risk-Sharing System for Agricultural Lending (NIRSAL) has formally launched a unique farming model to simultaneously empower smallholder farmers and boost agricultural production on a structured and sustainable basis at the Obafemi Awolowo University, Ile-Ife, Osun State.
The Managing Director of NIRSAL, Mr. Aliyu Abdulhameed, described the intervention as a new paradigm in agricultural primary production in the country.
The concept and philosophy behind the model was to provide a structured production system that is almost entirely driven by technology end to end, making it attractive to service and input providers as well as rewarding smallholder farmers.
NIRSAL’s focus on smallholder farmers was central to the mission of the corporation as they make up the overwhelming proportion of farmers in the country.
The MD said NIRSAL had so far 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 farming seasons from 2017 to 2018.
According to him, the FAM-SMART is an acronym for Farm Aggregation Model for Smallholder Agriculture based on Technology.
“It is a 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.”
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 hubs.
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 – proof of the great value NIRSAL places on its partnership with the respected institution.
The initiative was based on a projection that between 80 and 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, making FAM-SMART an attractive investment opportunity for banks and the entire financial services sector.
Abdulhameed, said 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 and underscored the immense potential profitability of the FAM-SMART concept.
Speaking at the occasion, the Vice Chancellor of OAU, Professor Eyitope Ogunbodede, expressed gratitude to NIRSAL for initiating the project in the university.
Highlighting the central role played by the institution in achieving the agricultural successes of the old Western Region, he said OAU was qualified and prepared to maximise 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,” he said.