Oke: Increased Funding For Bank Of Agriculture Will Boost Farming
Chairman of the All Farmers Association of Nigeria, Lagos Chapter, Femi Oke, spoke on the challenges of the agric sector and commended the role of the Bank of Agriculture in empowering farmers, among sundry issues in the sector. Jonathan Eze presents the excerpts:
What is your assessment of the Agric sector since the beginning of this current administration?
When this present government came into power, we were part of the policymakers that drafted the Nigerian agric agenda, particularly, we were called upon to express our minds as one of the key stakeholders to discuss on issues bordering on the country’s agric sector and their solutions. So what you are seeing happening in the sector currently are some of the things we pointed out that were needed to be resolved in the sector to forge ahead.
Essentially, at the stakeholders meeting with government officials, we told them that the Bank of Agriculture (BoA) needed to be recapitalised by the Central Bank of Nigeria (CBN) to make it viable for farmers to have easy access to agric funds.
In addition, we advised the government on the need to increase funding for Bank of Industry (BoI) for the purpose of strengthening the Nigeria’s industrial sector.
We also advocated for youth inclusiveness and women empowerment in the government. So those are the points we raised at the inception of this government when we were being called upon to participate in charting the way forward for the country’s economy. And we are happy that what we are seeing now are the things we yearned for at the meeting. At least we could say it’s going at about 50 per cent.
Agriculture is one of the three top priorities of this present administration. Can you say that President Muhammadu Buhari has revolutionised the country’s agric sector?
Yes, I agree with you on that area, because if you should look into the country as of today, the era of oil which everybody was focusing on has gone and we are now talking about agriculture as the key sector that every sector in the economy should embraced and we are happy about that. It is only regrettable that the fund allocated for the country’s agric sector is inadequate. But we realise that Rome was not built in a day as we have started from somewhere that is good for our economy. You will recall that last year’s budget allocation for the sector was about N92 billion and this year’s own its being increased to over N100 billion and this is giving us joy that we are now more recoignised in the Nigerian economy. So I will say yes again that President Buhari has done well and we are very excited about the situation in the agric sector and the economy.
Besides, we also appreciate what the former Agric Minister, Dr. Akinwunmi Adesina, has done in this sector. You can see that this present government did not rule out the giant strides he achieved for Nigeria’s agric development. You can see that this government has improved on the works of the previous government, especially in the area of agriculture and that is why we are getting these positive results. So everybody is now showing more interest in agric as critical tool to sustainable development. You can see that the country’s agric sector is now private sector driven. So we welcome the revolution that took place in the sector.
There are lots of prevailing challenges facing the nation’s agric sector from achieving its desired goals. What do you think are the missing links and the proffered solutions?
There is no way you will go into agriculture without finance. We are talking about the contributions of the Bank of Agriculture (BoA), Bank of Industry (BoI) and Central Bank of Nigeria precisely on agric sector development. And this is thanks to the present administration as we have said. It is gladdening to note that CBN officials are now going round across the country to sensitise us (farmers) to let us know what we don’t know on agric financing. They are making us to know that we can borrow money through the banks for agric development in a single digit interest rate. On the agric financing, the apex bank told us the commercial banks can apply on behalf of the farmers on a single digit rate. We just had a two-day seminar organised by the CBN for the Nigerian farmers in Lagos recently and we have never had such seminar years back. So all these ones are where we thought we are now seeing a better opportunity from this present government. The links we have lost out before, we are now trying to get it. And that was what is making us now to say that we can easily access funds like YOUWIN, TETFUND, GEP and other intervention schemes that BoI are now introducing for Nigerians. We are very happy to have seen it. It is making positive changes in this economy. So these intervention funds by the BoI and CBN are stimulating our interest to remain in the agric sector. But we will still lay more emphasis on agric financing.
So let the federal government strengthen BOA for the sake of farmers having access to cheap funds. The BOA is the major bank that links farmers with the government. We are advocating that BOA be funded very well for the sake of Nigerian farmers. We don’t want a situation whereby it is during harvesting period we shall be told to come for loans.
Indeed, we want the BOA to be under the CBN and not under FMARD as the situation is now. Let them be autonomous under CBN so that they can operate like the Commercial Banks and there will be no any bureaucratic bottlenecks like in the past.
However, we still want government to form a mutual partnership with the farmers on equipment leasing. Not many farmers can afford all these equipment we are now using in agriculture. Let there be Private-Public Partnership collaboration on equipment leasing in order to assist the Nigerian farmers. With availability of agric equipment, it will enhance farmers’ inputs and productivity.
Basically, lack of access to agric equipment financing is the reason most of our youths are being discouraged to go into agriculture. You will see a young person that read Agric Economics and other related agric courses in the higher institutions, he will tell you he wants to work in the bank because what he is seeing in the sector is not encouraging him. So we want a PPP synergy on agric equipment leasing whereby leasing companies under government can lease farm equipment to farmers at ease for farm cultivation.
Looking at the Nigeria’s agricultural non-export market, why are Nigerian exporters still facing difficulties at the point of loading goods for exports?
In that area, government agencies have a key role to play in order to achieve zero rejection of Nigerian agric produce meant for export market at the international scene.
Essentially, government agencies like Standards Organisation of Nigeria (SON), Nigerian Export Promotion Council (NEPC), Nigeria Export-Import Bank (NEXIM) and others still have a lot to do in sensitising Nigerian farmers and exporters in the area of agric export market. Because the standards already benchmarked by the European Union (EU) and other countries are high and cannot be manipulated.
So our export market sector is facing a lot of challenges currently now. The sector still has a lot to do in the areas of packaging, processing, documentation, tariff and others. So for us to meet up with the standards of another country, they (agencies) are the ones that know what is really obtainable in these countries’ markets. So they are in the best position to tell us what to do to meet the standard required in the EU countries. So the non- export market segment is one area that most of our members are not getting it right. For instance, if NEPC can come forward to tell us farmers this is the way you should pack your export produce we will be happy to listen. So NEPC has a critical role to play in this aspect and they should embrace us the farmers and exporters to succeed in the export market. They should let us benefit from the export market like what is happening in Ghana, Liberia and other neighbouring countries.
The Federal Ministry of Agriculture and Rural Development (FMARD) and other key stakeholders have complained on the Commercial Banks charging above 25 per cent lending rate for agriculture.
Do you think high interest rate is killing Nigeria’s agric sector growth?
Yes, the high interest rate which we are seeing in the country’s financial institutions has brought us back in agric investment growth because most of the commercial banks will tell you if you want to lend they will give you at 25 per cent or 30 per cent respectively. And if you are talking of agric lending, if it is not single digit interest rate, it should be grants. Most of the interviews I have granted I told them it should be grants. And if grant is not coming up, give them incentives like machines. Let it be free. We have seen some other countries that have benefitted from these incentives and grants. And that is why you are seeing most of their products abroad than Nigeria’s own. They are being supported by their countries. If it’s not grant, let it be incentives in the area of provision of landed property, easy access roads among others. Indeed, the commercial banks are the ones not making agric business to be very interesting and viable for farmers in Nigeria because of the high interest rate they are charging. And we cannot blame them for this because they are in business to make profit.
On the multiplier effect, most of these things come back to Nigerians, who are the final consumers buying these products in the market. So there is no way you are planting and you won’t take stocks of what you have planted. So government would have to come in into this area now to assist us resolve this lingering issue. Government needs to mandate the commercial banks that whosoever comes to lend money under agric business should not be more than single digit interest rate and as they are applying they should have a section like in CBN dedicated to oversee and any application from the commercial banks should quickly treated. Those are the areas I think Government should assist us the farmers urgently.
Government has been celebrating some of the agricultural produce like rice,. What is your opinion on it?
Agriculture played a peripheral role in the nation’s economy despite the vast array of land at our disposal and the sector has been neglected for so long. But now that oil has disappointed us, we now decided to wake up. Let us take the case of rice. If you asked Nigerians previously about the possibility of planting rice in the country, they would tell you that rice could not grow in the country, forgetting that we had gotten Ofada and Abakaliki rice. How many of the farmers were being encouraged to plant that specie of rice that time? People are now more conscious to diversify into agriculture as we do not retire there. The high cost of farm produces in the country will be things of past because of its availability.
What are the challenges in mechanised farming?
Most of our parcels of land in the Southern region are thick forests, which require bulldozers to uproot the stumps and roots of trees before cultivation of the ground, unlike the land in the Northern region that needs just tractors to till the ground before applying fertilizer. So, we have to rent bulldozers, and an average person will tell you that a bulldozer for a day, which is eight hours, is N80, 000. And they cannot even finish that one hectare in a day; it has to be two days that is N160, 000. Besides that, they will ask you to buy 100 litres of fuel a day, and that one goes for N40, 000.
The conductor and the driver of the tractor will still ask for their own cuts like N10, 000. So we are now putting the estimate at about N260, 000 to cultivate just a hectare of land, which is on the high side. So what we are now saying is that the governments, especially, those in the South-west, should have something like leasing machine partnership where we can lease, where they can be subsidised or government to buy them in various areas. For instance, in Lagos, we have many of our farms in Badagry, Epe and Ikorodu. If each of these areas has two leasing equipment, they encourage those of us in crop farming to quickly go there with small money to lease them because it is being subsidised. This will encourage us to do more farming.
Those in the livestock farming too are having their own problems, especially maize procurement. These days you will hardly see driers. In our last trip to Chicago, we saw some little driers. If you plant maize this year, you can’t sell it within the year until after a year because you have to dry them before selling. That is why you will see a crate of eggs cost as much as N1, 000 because there is no maize for those birds to feed on. And the breweries are now using the same maize for their production, meaning that they are now competing with us for use of maize. So, we want government to designate some areas where they can site driers for those into livestock farming to take their maize there, otherwise the cost of maize will still be escalating.
Source: THISDAY
