Professor Danbala Danju is the Managing Director of the Bank of Agriculture (BOA). In this interview with journalists in Kaduna, he highlighted how the Anchor Borrowers Programme (ABP) and the ban on rice importation will make the country an exporter of the produce in the next two years. He also spoke on how the issuance of land titles to farmers would kick-start agriculture revolution in Nigeria. Excerpts:
The Anchor Borrowers Programme is the latest programme on BOA's table, what is it about and how will it affect Nigeria's economy?
The anchor rice borrower programme is aimed at boosting domestic production. The country has been importing rice and because of the foreign exchange and the focus of the new administration to try to convince, the CBN came up with an anchor borrower programme and the Bank of Agriculture.
In the case of Kebbi we have pilot programmes because some of the commercial banks did not consider this profitable. The Bank of Agriculture is the best place to be which is the specialist agricultural development bank with more than 42 years of existence and more than 137 branches in the 36 states of the federation.
So, we came into the Anchor Borrower Programme with the aim of supporting farmers to boost domestic production of rice. If you take Kebbi as a whole it has about 75% farmers with about 98,000 hectares of land. Each farmer has a budget of about N210,000 per hectare disbursement, which is in two forms and largely they are given inputs like seeds, fertilizer, pumps and then they're given about N49,000 as working capital, then labour for land preparation and day- to- day management of the rice production.
You came from AfDB, what are you bringing to BOA?
The African Development Bank (AfDB) is the apex development bank in Africa. We are talking about over a hundred billion in terms of dollars. The case of the development bank is based on our capital base, obviously in terms of staff compensation, training facilities and in terms of technology. We're talking about some of the best IT input and over 78 countries. Here of course, we have largely the Ministry of Finance and the Central Bank as the main shareholders. The two are wide afar, but there is something common to them, which is that, they promote agriculture development and financial inclusion.
How do you recover the loan?
Now, on the issue of recovery, the farmers are just harvesting and we have set up machinery in conjunction with the Kebbi State Government; about 73 collection centres have been identified, along with our staff and supporting security agencies and traditional rulers, we are targeting to recover 100 per cent the amount we expended during the dry season.
You said the programme is meant for small scale farmers, how do you ensure that the big scale farmers do not highjack it?
What we have done is that, there is a farmers' registration; all the farmers had to register with Bank of Agriculture. We have to collect their biometrics and in addition to that we issued them with BVN so that we now have the identity of the farmers. The target is for the small scale farmers who have an average hectare of one to a maximum of 5 hectares. This is what we have been doing and this is what we are going to do. There is a private company that is partnering with us to properly register and identify the farmers to avoid duplication.
For the large scale farmers, we're coming up with a special facility for them under a new arrangement for funding agriculture in our country. They have a different interest structure; it is a different instrument that we are using.
Under the anchor programme we are largely targeting the small holder farmers.
How is the programme received in areas affected by crisis like the North-East and recently the Niger Delta areas?
You remember we did not start at once in all the states of the federation, we started in Kebbi and we are using the lessons we learnt in Kebbi; we are now strategising how to target 13 states of the federation with respect to rice. So the lessons are very clear from Kebbi, we need a robust farmer identification. In the past, people will collect money and then divert it for other purposes, this time around we're disbursing mainly in kind. We give farmers high quality seeds, pesticides, fertilizers and we also give them some kind of training to make sure they adopt the correct agronomic practices in order to have the expected yields.
Traditionally they used to have one ton of paddy per hectare but with the new high yielding seeds given to them as well as better agronomic practices, they now can have 5 tons per hectare which is quite an improvement and they're able to make lots of money. They can now pay us back and we could recycle to reach more farmers.
So, what we've started with is the pilot programme which is now going to be scaled-up in all the states of the federation that have comparative advantage in rice production.
Is it only a dry season farming programme?
No it is not, like now, we have started with dry season, and we're going into the wet season. For the wet season in the next couple of weeks we're targeting 300,000 farmers. Now after the wet season we're planning for the dry season. So, it is going to be both wet and dry season farming.
You talked about measures to check diversion of funds, how do you prevent diversion of produce?In the past people would be given N210,000 per hectare to go and buy inputs, or what you want to do and then come back and pay. Now, under the current programme we don't give farmers money. Before we give farmers money, we first of all have to identify who are the farmers. And once farmers are identified, they register with the bank and there's a committee made up of our representative, farmers representatives (the Rice Farmers Association of Nigeria (RIFAN), and the off-takers, so that we identify who is the farmer. We've got quality inputs and other seeds companies that supply farmers with high quality inputs and this way, we don't give money. We give largely 4/5 of the money in kind; we give farmers the inputs they need and the inputs are high quality from very high quality sources.
The only money we give them is about 1/5 of the amount, which is for land clearing, preparation, weeding and transport. And that amount of money we don't give all at a go; there are stages - the land preparation stage, planting stage. Even the inputs we don't give them all at a go, for instance, fertilizers or pesticides all of these are given at different stages in the production process.
So, it's a kind of controlled process. We kind of identify the different stages which are about three to four during which we release the inputs to farmers.
How do you curb diversion of produce?
The farmers are in clusters, and each of the clusters is attached to a particular off-taker. Now, whatever they produce they deliver to the off-taker, who will pay them through us and on the basis of that, we take out the inputs cost that we expended to the farmer. Nonetheless, it is not watertight, we've had reports of farmers delivering a portion of the paddy to off-taker and also selling to other buyers.
How sustainable is the programme?
Like I said, the sustainability of this programme first of all is in the module. For a programme to be sustainable it has to be financially profitable. Farmers in the past had no guaranteed source of credit, now if you're registered with the Bank of Agriculture you'll have the credit to produce your paddy. In the past, they had no guaranteed market, no off-takers. So, now you're registered, you have already made market and now, the ban on importation of rice makes it very lucrative for farmers.
We hope the federal government will sustain the ban on importation of rice because if you now open the gate to importation of cheaper, subsidized rice from other economies that will undermined the profitability of existing rice mills and in turn the profitability of the out-growers. So, we hope that the issue of ban on importation of rice would be sustained, and also the issues of exchange rate. Curiously an overvalued exchange rate makes it cheaper to import rice but if we now allow for a more realistic pricing of foreign currency or a more appropriate value for the naira, it will be good for farmers because instead of importing you will now be encouraged to produce more.
Fourthly, I think there is a question of infrastructure, as we're producing rice currently the productivity must be enhanced, in this case more research in terms of output of the seeds. We need high yielding seed varieties of rice and we also need to provide the irrigation, transport infrastructures and the capacity of existing rice mills that need to be expanded and new ones established. If we are able to implement all these measures, I think not only will we be able to achieve domestic self-sufficiency but will also be able to export in less than two years.
There are cases of farmers being ignorant of programmes like these, how do you select farmers and get to them in terms of publicity?
What we are doing is more communication and publicity through interaction to bring to the attention of the general populace, that Nigeria can achieve domestic self-sufficiency in rice, sorghum, millet, wheat, tomatoes etc. We are also planning to intensify, through radio jingles, television adverts, through our local branch network and rice farmers association that there are opportunities to partner with BOA in key staple crops like rice, wheat, sugar, soya beans as well as livestock and fisheries here now. That government is funding BOA and that we're prepared to scale this up in all the states of the federation and FCT.
So, we're intensifying our publicity. In fact we're also going to employ even drama series to highlight the opportunities in the agricultural sector to create more jobs, but more especially among the farmers that the resources are now coming through the BOA that they could apply and we'll support them. The figures I have with me here is a list for about 13 different states and we want to make sure that farmers are availed the opportunity. We want to use all the media - electronic, social media etc - to highlight this opportunities.
How much are you giving out in the project?
We started just during the last dry season; individually I can't give you the total figure. What we're trying to do is that we piloted in Kebbi, now having seen the success in Kebbi we're now planning to go to the 13 states of the federation and we have a target number of about 300,000 farmers. If you have 300,000 farmers on an average price of about N180,000 per hectare you can see the amount we're requesting. We're requesting huge sums from the CBN so that we can support the small scale farmers.
We also plan to request some money from CBN to support large scale farmers. Put simply we're working with different states to identify the target number of farmers in each of the states. And on the basis of this agreement with the CBN we will then request for funding. We're assured by the CBN that once we present the list of farmers with the BVN we'll be supported with the requisite sum of money.
Credit: Daily Trust
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