Diversification of the economy is not an empty statement. This involves targeted policies, actions and investments, supported by motivation and incentives. FEMI IBIROGBA writes about how farmers can use the scheme of anchor borrowing by concluding contracts with food producers.
The release of agricultural products has been described as a means to deepen the industrialization of crops, an incentive to improve agricultural productivity and address the problem of poor financing of agriculture in the country. Also called SUV scheme, selection means guaranteed purchase of all harvests of a group of farmers of a certain crop for industrial processing with relatively stable and mutually predetermined prices.
An industrial operator or processor agrees to buy what farmers produce, usually backed up by agreement, and companies or processors that select products often provide resources, facilities, technical know-how, cutting-edge manufacturing techniques, improved varieties of seeds and seedlings, among other things. The program of anchor borrowing of the federal government was launched in November 2015.
The purpose of this scheme is to create a link between the companies involved in the selection process of key agricultural products and small farmers. The focus of ABP is the provision of seeds to farmers and cash for growing crops, and it is expected that this will increase the production of selected goods and ensure a constant supply of goods to agro-industrialists.
The program is designed for farmers who produce such cereals as rice, corn and wheat; roots and tubers such as cassava, potatoes, yams and ginger; Wood cultures, such as oil palm, cocoa and rubber; beans such as soy, sesame seeds and cowpea; Cattle, such as fish, poultry and ruminants. Also included are cotton, sugar cane and tomato.
Participating banks that work with CBN provide Anchors with 9% per annum for subsequent payment to farmers. The loan is returned to farmers after harvest, which must cover the principal amount of the loan and interest. However, some farmers complained about the lack of anchors (trappers) for their products. The Association of Fishermen of Soma and the Allies of Nigeria (CAFFAN) stated that its members can not participate in this scheme, because there is no processor that could guarantee and release their products.
This was reported by the National Association President Rotimi Ola. He complained about difficulties with selling locally produced fish due to tough price competition against imported and smuggled fish and poultry products, since the absence of large-scale catfish processors interfered with industrial production and, consequently, the sluggish growth of the subsector.
Rice farmers and mills
In connection with efforts to reduce the import of foreign currency per year, the first crop, which received a greater emphasis and included as many farmers as possible, is rice. The anchors in the program are Olam Rice, the government of Kebbi and Lagos, rice Dangote, Ebony and Eagle Best Rice. These and other local rice producers facilitate the provision of loans, improved rice seeds, fertilizers and agrochemicals to rice farmers acting as guarantors and helping to reduce the risk of investment through insurance through the Nigeria Agricultural Credit Risk Distribution System (NIRSAL),
This does not require a pledge from farmers who must have been registered in the cooperative. Olam Rice has more than 3,000 producer farmers who produce attachments for the rice plant of the company in Rukubi, in the state of Nasarawa. Farmers have access to the source data and technical expertise of the company, which from time to time attracts agronomists to farmers' fields for help. Existing rice farmers who want to expand their activities should not hesitate to join a rice-growing cooperative to gain access to financing for expansion, the Regional Coordinator of the Rice Center for Africa, Dr Francis Nvilena, advised.
He said that through borrowing and anchoring borrowings, rice farming can become easier for farmers belonging to cooperatives, and obtaining quality planting materials from the center is beneficial to farmers and the country, because higher yields can be obtained from newly developed varieties. According to him, growing seeds in the form of seeds will reduce the average yield per hectare.
Kassava farmers and flour mills
Regional Cassava Coordinator: Adding Value to Africa (C: AVA), a project funded by the Bill and Melinda Gates Foundation, contributing to the development of a cassava value chain to reduce hunger and increase household income, Professor Kolavole Adebayo, by way of simplifying formalities, even small farmers now have access to large cassava producers through the C: AVA project, linking such farmers to supply chain managers to purchase their products at standard rates.
Professor Adebayo said: "When better crops are available, some farmers have problems selling their crops, because they are not large enough to attract these large buyers. So, we intervene at this stage to help them enter new markets. "
Farmers and processors of maize
The production of corn is becoming popular not only in Nigeria, but all over the world thanks to its multi-purpose use. Corn grains are used in flakes, staple processed foods, animal feeds, starch and ethanol, as well as essential oil. In the animal feed sector, there are many supporters, including Premier FeedMills Ltd, the manufacturer of the Topfeed brand; Animal Care Consult; Hybrid channels and others. Food processors such as Olam Grains, Flour Mills Nigeria and many others are also regularly moving away from farmers, guaranteeing and supporting a ready and stable market at predictable prices.
The chairman of the Oyo State Commodity Association, Mr. John Olateru, admitted that although the group did not have supporters and they did not apply for ABP loans, feed farmers and poultry farmers in the association always bought any quantity of corn produced by the members of the commodity association.
The scheme of anchor borrowing and the selection of products from farmers facilitate financing. Borrowing to expand the activities of farms and increase productivity is enhanced by the scheme, eliminating personal security security due to "triangulation" of the system. The Bank uses the pledge and business reputation of supporters to approve loans for farmers who are usually in registered groups.
Loan payment is also facilitated in harvesting, as the farmer is paid the balance after deducting borrowed capital and interest, which does not provide an opportunity for defaults. NIRSAL also guarantees a loan, reducing the risk of the process if unforeseen circumstances hinder the production or repayment of a loan.
Access to farmland and mechanization
The participation of groups in the schemes allows members to have access to cheaper mechanization of farms in terms of mechanized land preparation with the help of arable, boron-forming and spinal tools; planting with mechanical planters and controlling weeds, protecting crops by spraying agrochemicals with an arrow. At the same time, it reduces costs and prevents delays, since large operations motivate enterprises to hire tractors to mobilize on farms on time.
For tractor operators it is easier and more economical to work on several hectares of agricultural land in a place than in different places. Consequently, reducing costs for operators and farmers is an advantage that farmers need to learn.
Thanks to advanced technologies, it is easier for farmers to obtain the best available seeds, seedlings, agrochemicals and other materials that will contribute to successful agriculture. These companies can enter source data locally or import, if they are not available. The quality of seeds and seedlings determines the yield, and access to improved seeds guarantees the harvesting of the bumper. Acquisition and increase in crop yields are facilitated for original chemicals, and fertilizers are facilitated by purchasing companies.
The use of adulterated agrochemicals is responsible for unsatisfactory plant protection, and in the end, meager crops have destroyed the economies of most of the farmers in the country. Consequently, anchor borrowing and withdrawal schemes are sure channels through which farmers can receive reliable deposits that will ensure productivity and profit. For example, Africa Rice Center, the breeder of the most adaptive and high-yielding rice varieties available in Nigeria and Africa, participates in the provision of rice seeds to rice farmers in schemes for anchoring borrowings and exports.
FARO 44, one of the rocks of this center, is known for a high yield of more than five metric tons per hectare against two to three tons of harvest from other varieties. Contracts for over-the-counter and off-plant contracts have become pivotal gaming mechanisms in the commercialization and financing of agriculture, allowing farmers to access more resources, plan and expand farm operations. Although there are problems associated with corruption and unethical practices, the scheme, if it is amended, is able to provide adequate funding, improve crop yields and industrialize most cultures and diversify the economy.