LAGOS – Stakeholders in the agricultural sector have stressed the need for players in the sector to always keep to their promises to repay whatever loans they got, especially such that was released by the by the Federal Government, through its agencies such as the Central Bank of Nigeria (CBN), NIRSAL Microfinance Bank, among other revolving loans.
They said consequences of not meeting repayment obligation include shrinking opportunities for more farmers, collateral damage to food sufficiency drive and hunger.
The Anchor Borrowers’ Programme (ABP) of the Federal Government was launched in November 2015 and the purpose of the scheme is to create a linkage between companies involved in processing or exporting key agricultural commodities and small-holder farmers. The focus of ABP is to provide seed to farmers and cash to grow the crops, and it is expected that this would boost production of the selected commodities and make economic industrialisation through substitution a reality.
The ABP scheme targets small-scale farmers cultivating fewer than five hectares of land and producing cereals such as rice, maize, and wheat; roots and tubers such as cassava, potatoes, yam, and ginger; tree crops like oil palm, cocoa, and rubber; legumes such as soybean, sesame seed, and cowpea; livestock such as fish, poultry and ruminants. Also included are cotton, sugarcane and tomato.
The participating banks, which work with the CBN, lend to farmers at nine per cent yearly and the loan is repaid by the farmers with the harvested crops.
However, the scheme is threatened as recouping the so-called revolving loans has been difficult, especially at the small-holder level where such loans are often seen as grants and empowerment schemes.
Stakeholders in separate interviews with Daily Independent, said the insecurity situation in the country is largely responsible for non-repayment of the loans as so many farmers, being financed by these revolving loans, have been displaced while some have been killed.
They said it is the responsibility of the government to provide finance for agriculture and it is also the responsibility of the government to secure lives and properties.
Abdulrasheed Magaji, Chairman, All Farmers Association of Nigeria (AFAN), Kano State chapter, said that if loans were facilitated through farmers’ cooperatives and associations such as AFAN, recovery would be easier.
He said factors such as poor disbursements via timing, incomplete packages, inflation of input prices and advancing loans to wrong and undeserving beneficiaries are part of the causes of inability to recoup loans from farmers.
He said he believes that if these factors could be corrected and taken care of, farmers will definitely repay any loan, especially if procedures of giving out the loans are to be observed.
“I can’t say that 100 per cent repayment can be made, but excellent recovery would be made.”
Magaji said: “Reasons for loan default emanate from or are technically planned and made possible by those government officials saddled with the responsibilities to manage and execute the processing and disbursement of the loans.”
He advised farmers to insist on seeing the original loan documents and reject any incomplete loan package, adding: “And farmers’ leaders should also fear God and stop conniving with government officials to short-change their followers.”
Adeola Adegoke, National President, Cocoa Farmers’ Association of Nigeria (CFAN), said the loan was the first one that was given to the farmers for cocoa maintenance, the first of its kind since 2015 when the ABP started.
He said farmers, who got the loans through his leadership are preparing for it, adding that a lot of sensitisation has been made among the beneficiaries and that as at today, there is no problem that the farmers are paying as have agreed upon by the association.
“The loans cocoa farmers got through my leadership, we are prepared for it. We have done a lot of sensitisation among the beneficiaries and as at today, there is no problem. My farmers are paying as we have agreed as an association.
“We cannot say things are working right 100 percent; why I am saying this is that we have people that have experienced natural disasters in one way or the other.
“Government has the responsibility to finance agriculture. The same government has the responsibility to provide security. Some media houses have been reporting non-payment of loans by farmers in general terms because as of today, we don’t have issues with people paying in the cocoa sector but in the general terms.”
Adegoke noted that farmers are the highest victims of insecurity in this country, adding that on a daily basis, farmers are being killed and displaced from their homes.
“Most of all these people killed are being financed in one way or the other; many of them are losing their lives. Do you know how many of those financed have lost their lives and our financial experts are collating the names of those that have not paid, not knowing that many of them are in the grave. Many are in the hospitals and many cannot go back to their farms because they have been displaced.
“The public must realise that a certain number of farmers close to 40 to 50 percent who are also beneficiaries of the ABP have been displaced. We can see this every day, they are farmers who are being financed by the CBN. How will they pay back? We should not put this on the farmers not wanting to pay back so that we don’t destroy the system,” he added
Also, Kabir Ibrahim, president, All Farmers’ Association of Nigeria (AFAN), advised farmers to pay any loan they take “so that others would be able to obtain loans because no government has enough resources to satisfy the needs of all Nigerian farmers.
“The repayments are used to give those who are in line waiting for their turns as the loans are revolving in most cases,” he said.
Professor Kolawole Adebayo, a former Regional Coordinator of the Cassava: Adding Value for Africa (CAVA), had said through off-taking scheme, small-scale farmers had access to big cassava processors through the CAVA project by linking such farmers to supply chain managers for the purchase of their produce at standardised rates.
Professor Adebayo had said: “When improved yields are available, some of the farmers had challenges selling their yields because they were not large enough to attract those large buyers. So, we intervened at this stage to help them to access new markets.”
Loan repayment is also made easier at harvest, because a farmer is paid the balance after deducting the borrowed capital and the interest, giving no room for defaults.
Source: Daily Independent