Scaling Up Access to Finance for Farmers


Access to finance is critical for the growth of the agriculture sector as well as to drive mechanised farming in the country, writes Obinna Chima

Unarguably, the Nigerian agricultural sector has gone through a chequered history.

The uninspiring performance of the sector in terms of its contribution to the country’s revenue has also been a source of concern to successive governments.

This had led to the creation of various initiatives by both the monetary and fiscal authorities, aimed at taking the agriculture sector out of the doldrums.

Unfortunately, despite these efforts, the sector’s contribution has remained insignificant.
That is why with Nigeria’s dwindling revenue profile, experts have stressed the need for more support to be given to the agriculture.

Nigeria, just like most countries and institutions have continued to push for large-scale agricultural transformation as part of efforts to achieve increased growth and reduced rural poverty.

Based on the fact that the country is blessed with favourable climatic conditions, vast arable land and fertile soils, it has never been in doubt, the significant role agriculture should play in the nation’s quest to achieve sustainable development.

That is organisations such as Blaid Farms ventured into the agricultural sector as well as support the federal government’s food security objective.

Blaid Farms is a mechanised farm that is situated on 48-hectares of land in Abuja.
The company’s Chief Executive Officer, Mrs. Ochuko Momoh, believes that there is need for concerted efforts to increase agricultural productivity in the country.

To her, improving access to finance for farmers would go a long way in enhancing their output as well enhance job creation.

For the Central Bank of Nigeria (CBN), its development finance initiatives have led to increased support for farmers in the country.

For instance, the CBN Governor, Mr. Godwin Emefiele, recently pointed out that under its Anchor Borrower Programme (ABP), the central bank has ensured that Nigeria emerged from being a net importer of rice to becoming a major producer of rice, supplying key markets in neighbouring countries.

As at October 2018, a total number of 862,069 farmers cultivating about 835,239 hectares, across 16 different commodities, have so far benefited from the Anchor Borrowers programme, which has generated 2,502,675 jobs across the country.

Also, under the auspices of the Bankers Committee, the sum of over N60 billion has so far been set aside under the AGSMIES fund to fund micro, small and medium scale enterprise businesses in the agriculture and manufacturing sectors of the economy. There is among other initiatives, the Commercial Agric Credit Scheme, for farmers.

Emefiele, had pointed out that the CBN recognises that the greatest challenge confronting MSME’s and local farmers is access to credit, and that to unlock growth potentials in the country; these groups must access funding seamlessly.

But Momoh is calling on the central bank to intervene in ensuring that participating financial institutions in its various schemes in the agricultural sector simplify the process so that genuine farmers in the country can access such loans to meet the federal government’s economic diversification objective.

“The process of getting these loans is too long. To get the loan can take you over eight months. Go and find out. It is a very long process. Go to the banks to find out how many people have gotten this loan.

“Sometimes, they tend to support those with one or two hectares. But such kind of farms cannot feed a village. We are talking about supporting farms that can feed very large number of our population. I tell people that Nigeria would generate more revenue by exporting food than crude oil if we take it seriously,” she said in an interview with THISDAY.

She stressed that agriculture in Nigeria has a lot of potential. However, Momoh maintained that access to credit has remained a challenge for farmers in the country.

“I had this land for almost six years, but getting the finance was very frustrating. Like I said earlier, the process of getting agriculture loan is very frustrating.

“For instance, to access agriculture loan, one of the requirements is that you must first have an existing farm.
“Somebody wants a loan to set up a farm, but they are saying a first criteria is that the person must have an existing farm. Of course, we had the land, but we didn’t have anything on the land,” she added.

Blaid Farms carries out all-year round cultivation and is not affected by rainy or dry season. Its eggs, vegetable, lettuce, as well as our fish, are all-year round production. The farm has provided job opportunities for several Nigerians and has continued to embark on corporate social responsibility initiatives to support its host community.

Blaid Farm has a greenhouse; therefore, the weather condition doesn’t affect its crops. Owing to this, some of its crops, such as lettuce, are harvested every 21 days.

It is an integrated farm and so if one crop doesn’t do well, others would cover the cost of production.
Everything in the farm is automatic and technology-driven. Some of its customers are Shoprite and other retailers in Abuja and Lagos, with an ever-rising demand for its products in other states in the country.

It operates the recycling aquatic fish farming system. This system of fish farming produces 15 tonnes more than the local fish farming system. That is because oxygen is supplied all the time to the fish. Tilapia mainly is very sensitive to oxygen. It is not like the catfish. Catfish doesn’t care about oxygen, but tilapia requires enough oxygen, clean water and feed to grow. So, it’s a hi-tech system. The system requires only two people to operate it, unlike the traditional method that requires a lot of people. It delivers 20 tonnes per year.

Another challenge farmers face in the country is the high cost associated with export of agricultural produce.
“You would not believe that we got markets for our products in Ghana, but we cannot export these products. Why can’t we export? The airlines alone, because these are perishable things – tomatoes, lettuce – and so they must go by air and not by road.

“First of all, the airline is charging you $1.30 to carry just one item to Ghana, not the United States and not London. That is not bad enough.

“Then all the government taxes you have to pay comes to $2.50. So, to export one kilo of cucumber comes to $3.70. Now, you have not talked about the amount the person that is selling in Ghana is going to clear it with.

“So, to export one kilo of cucumber, we have to pay $3.70. How much is the cucumber? N300! So, luckily, we are still struggling to satisfy the Abuja market. Our customers from Accra have been calling and I have told them about the challenge we are facing,” Momoh said while narrating her ordeal.

Nevertheless, her passion for farming will not allow the challenges to deter her, even as she continues to look up to the central bank and other financial institutions for support. She also expressed gratitude to Standard Chartered Bank for the bank’s support.

Her projection is that, “in five years, I want to be able to own 300 hectares of farmland. We are working on having orchards, 30 hectares of banana plantation and 30 hectares of farm plantation and in that way, you are able to feed every one.”

Momoh added: “I am getting demand for eggs and other farm produce from Lagos, Port Harcourt, Ibadan, but I can’t meet the demand. So, we would keep developing the farm.

“There is a lot of potential, not only for the local market, but for import as well. But there is need for appropriate government policies.”