Bank of Agriculture plans single digit interest rate for farmers

In support of the diversification drive of the Federal Government, the Bank of Agriculture (BOA) is considering a single digit interest rate for farmers in the country.
Managing Director and Chief Executive of the bank, Prof. Danbala Danju said the Federal Ministry of Agriculture and rural development, in conjunction with the bank, was considering the review, as well as other incentives to ensure massive investments in agriculture.

Danju, at an international conference on agriculture with the theme: “Back to Agriculture”, held in Lagos, said the minister of agriculture was thinking in that line, as “a situation where farmers in other countries are been offered between two to four per cent where we are charging 14 per cent, taking into consideration administrative charges among other charges, is not conducive for investments in agriculture.”

Presenting a paper titled: “Financing agriculture for economic growth in Nigeria”, he revealed that the bank is already piloting an initiative of the CBN.“The Central Bank has set aside about N200 billion. We will get the fund from the CBN and finance the input of farmers.”

He said about 75,000 farmers have benefited from loans from the BOA in the last three months and the targets is now about three hundred thousand farmers for the wet season, with the hoping of increasing the number as operations are been scaled-up in various parts of the country.

“The aquaculture loan is targeted at key crops like, rice, wheat and tomatoes borrowed from CBN at two per cent and lend it to farmers at nine per cent with a payment period of one year and we are thinking of developing payment structure that would be based on production cycle. Up till now, farmers consider funds from bank of agriculture as part of national cake. We have for instance about N20 Billion of defaulters, we been advertising for people to come and pay back,” he said.

“The bank of agriculture like every other Banks could only survive if windows credits are paid back. Non-payment is why we are introducing other mechanism first to identify farmers. Those who came to us in the past were non-farmers. We are now introducing bank verification numbers. We are taking steps to see for instance, if you say you have one or two hectares of lands, we have to verify buying GPS approach system to know the exact location amongst other measures.”

According to him, the bank is exploring the concept of land bank, which has been tried particularly in China and other countries with much success. “This is to ensure that people have access to land especially commercial land for agriculture and also to utilise the vast un-utilised land that would be available through the land bank initiative. We will be asking state governments to give us like 50,000 hectares so that we can lease out for agricultural development and on profit basis.

We have issued directives to farmers, groups of farmers and associations to form agricultural cooperatives. We also have collaborations with state governments, with ministries, agencies as well as international partners like world bank, Africa development bank and several bi-lateral developmental institutions with a view to bring in more investment to support agro-business investment”.

He said the bank was focusing on input procurements like fertilizers, seeds, and development of agricultural mechanisation products and special consideration for Farmers in Nigeria especially, women who are seen as lacking access to finance as well as the youths in agriculture programme.

“We are thinking of major shift towards digital agriculture, Dr. Adeshina pioneered it here and the current Minister of Agriculture, Audu Ogbeh and the secretary general of Nigerian Agro-business group also shares the view in which very soon in Nigeria, we would have data bank for farmers, creating an ecosystem where you have input providers, the farmers, the marketers interacting in the same environment which will take Nigeria to a higher level in agricultural development.”

“Investment in agriculture requires not only the federal government but also private sectors as well as international development partners. We are trying to restructure the Bank of Agriculture in such a way that we are able to provide technological resources, financial resources, extension services that is why we are partnering with groups, the institutions and research organisations finance and all these are aimed to have a professional and specialist bank of agriculture that would achieve the dream of agricultural transformation that we started before”, he explained.

In her presentation, the Director General of the Federal Institute of Industrial Research, (FIIRO), Dr. Mrs. Gloria Elemo said agriculture revolution could put the nation back on the track as the over dependency on the oil sector brought about downturn moment in the once vibrant agricultural sector.

Elemo told the gathering that the institute was ready to foster growth in the agriculture sector with over 250,000 technologies on ground for agriculture and agro-alied businesses stressing that operators in the sector should contact the institute for deployment of the initiative.

Also speaking, acting deputy high commissioner and director, Uk trade and investment, Nigeria, Mr. Ahmed Bashir MBE disclosed that Nigeria has the potential to rise to world class in agriculture if constraint to growth in the sector are eliminated and skills are built through market development programmes as adopted in the United Kingdom which rely on high tech sector for storage, processing and livestock farming.

The convener of the event, Prof Pat Utomi of the Centre for Value and Leadership bemoaned lip service attention been given to the agricultural sector in the last 30 years noting that the chickens have come home to roost.

“We see Suadi Arabia and other oil producing countries restructuring and diversifying aggressively, somehow the Nigerian elite seems to be waiting for oil prices to rise again oblivious of the fact that this finite resources already vulnerable to renewable energy sources and the impact of alternative fossil fuel driven by new technology,” he said.

Others speakers at the event also urged government and other stakeholders to massively deploy all necessary skills to ensure growth, boost the capacity of farmers, food security and sufficiency to match up with the growth in population.