Agriculture Economy News

CBN Approves Dry Season Farming Incentives For Farmers

The additional incentives are expected to aid production and ensure food security in the country, while checking inflation tide

In an effort to boost 2020 dry season farming, the Central Bank of Nigeria (CBN), has approved more incentives under its Anchor Borrowers Programme (ABP) for smallholders farmers (SHFs).

The additional incentives are expected to aid production and ensure food security in the country, while checking inflation tide, and slashing farmers risk portfolio from 75 to 50 per cent, and increase CBN’s collateral guarantee to 50 per cent up from 25 per cent.

This was announced at the launch of this year’s Dry Season Farming by the Director, Development Finance, CBN, Philip Yusuf, and is aimed at ensuring that farmers increased their productivity level to lower the component of food import into Nigeria.

Yusuf told stakeholders, comprising maize, wheat, rice, and cassava farmers and processors that the apex bank was willing and open to suggestions that would help eliminate their challenges to boost productivity.

Yusuf said: “I wish to welcome you all to this grand occasion with the primary objective of massive financing of farmers for the 2020 dry season cultivation as part of the bank’s intervention on some focal commodities.

“I am indeed excited about this meeting as it is very apt at this crucial period of our economic development, given the recent happenings in the country, including the COVID-19 pandemic, which you are all aware of.

“Let me share some background on the ABP. The ABP emerged in 2015 to create a linkage between anchor companies involved in the processing and smallholder farmers (SHFs) of the key agricultural commodities.

“It is primarily used to finance farmers in groups and associations so that they will have all the inputs needed by them to reap bountiful harvest.

“The programme thrust of the ABP is the provision of farm inputs in kind to smallholder farmers to boost production of these commodities, stabilise input supply to agro processors and address the country’s negative balance of payments on food.

“At harvest, the SHFs supply his/her produce to the agro-processor (Anchor), who pays for the produce. The Anchor selected is mostly a private large-scale integrated processor, who has entered into agreement with the SHFs to off-take the harvested produce at an agreed price.

“Anchors could also be commodity associations or state governments having met prescribed conditions as set out by the ABP guideline.

“From 2016 to date, the bank has funded SHF to the tune of N374 billion across cassava, maize, cotton and rice.

“Specifically, in 2020 wet season farming, the bank disbursed over N200 billion to SHFs, which is the highest amount disbursed in a single year from the inception of the programme.

“In this season, we have emphasized the use of new improved seeds which will guarantee bumper harvest for the farmers and enable the SHFs to pay back their loans with ease. The season also saw more involvement of prime anchors participation in the programme.”

“The proposed 2020 dry season farming will focus on the use of contagious lands for mechanization by increasing land under cultivation with the state governments contributing between 20,000 and 100,000 hectares, use of improved seed and establishment of off take agreement,” Yusuf said.

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