There is renewed media blitz on the availability of different forms of agricultural credit facilities to farmers in the country. These agricultural loans being advertised come in different modes from different sources. The purported loans are branded by state and federal governments, agencies and banks among others. The various credit facilities include; agricultural credit guarantee scheme funds, the International Fund for Agricultural Development (IFAD) facilitated farmer’s loans, agricultural loans from the Nigerian Agricultural Cooperative and Rural Development Bank (NACRDB) and from several state government agencies. Others are the N50 billion consolidated fund from the Bankers Committee, the World Bank assisted agric. credit programmes, etc...
Despite the good intention of these programmes, the reality is that it is easier for a camel to pass through the eye of a needle than for farmers to access these loans. Institutionalized corruption, stringent conditions attached to these credits, farmers’ reluctance to come forward and access the facilities, farmers’ ignorance and low level of education are some of the reasons adduced for the failure of various credit schemes. Anyhow we perceive it; this inability is a setback to food security and agricultural development, and the relevant bodies saddled with the responsibility of monitoring the implementation of the various credit facilities seem unbothered or are simply overwhelmed with the intractable problem.
Each time there is a new agricultural credit programme, most farmers are always apprehensive and reluctant to believe that it is genuine or reliable partly due to their unpalatable past experiences. This difficulty is aptly captured by the former president Olusegun Obasonjo, under whose regime many agric. credit facilities were initiated without appreciable success, when he once wrote in his letter to the senate lamenting the low level of farmers’ access to the bankers’ N50 billion agricultural credit funds. He reported in September 2005 that only N7.1 billion was accessed with only 389 applicant farmers throughout the country ten months after the scheme was inaugurated.
This infinitesimal fraction of millions of credit needed farmers is indicative and instructive of the wholesale problem of agricultural credit schemes in Nigeria. The problem is complicated because no serious organizational structure is put in place to evaluate initial credit facilities before new ones are initiated and there is lack of synchronization of schemes by different loans agencies of government and private sector initiatives.
Food security is the central plank of the millennium development goal one of reducing to half the population of hungry people globally by the year 2015. It would remain a figment of the imagination for Nigeria to achieve this without sustainable agricultural development.
Availability and accessibility of agricultural credits with negligible interest rates is non negotiable for this goal achievement if we are indeed serious to join the league of MDG’s compliant nations.
Prior to the ‘70s, various regional governments initiatives were put in place to make credit available to farmers particularly the micro, small and medium scale ones to complement commercial banks, the oldest credit institutions in the country.
In 1949, the Western Nigeria Development Board took over responsibility for farm credit supply in Western Nigeria and in 1955 the Western Region Finance Corporation took over the administration of credit to farmers. The repayment percentage of 49 percent for individual loans was recorded while 64 percent was recorded for co-operatives, suggesting the desirability of lending to the co-operatives.
The Eastern Nigeria provided credit to its farmers through the Fund for Agricultural and Industrial Development (FAID) established in 1950. The Northern region administered credit by the Registrar of Co-operatives under which government guaranteed loans from the defunct Barclays Bank with the ministry of agriculture operating a credit programme through the native authorities. Over all lending to groups were more successful than to individual farmers in terms of repayment.
In 1973, the Nigerian Agriculture and Credit Bank (NACB) was established by the federal government with the core objective of providing loans for the development of the Nigerian agriculture to lend to individual farmers, co-operative societies and for integrated rural development projects. NACB was later developed into the Nigerian Agricultural Cooperative and Rural Development Bank Limited (NACRDB) in the year 2000. It is a product of NACB, Peoples Bank of Nigeria (PBN) and risk asset of the Family Economic Advancement Programme. (FEAP)
World Bank sponsored Credit Scheme is another global concern for the development of agriculture in developing economy including Nigeria in the ‘80s. The Agricultural Development Project (ADP) is one of the World Bank – Nigeria sponsored counterpart programmes to organize and finance small scale agriculture with territorial specification to the local farmer needs and assistance. Spread across the states of the federation, the project collapsed mainly because of the failure of the state and federal government to fulfill their counterpart financial obligation to the project. Again the hope of agricultural transformation was dashed. The ADP remains a carcass of its glorious past today having lost steam
The Obasanjo regime 1999 – 2007 witnessed a lot of presidential initiatives on agriculture such as cassava revolution, cocoa rehabilitation programme, fadama 1 & 2 projects and various others with the intention to increase output and farmers income but as usual failed to achieve the desired results because of lack of back up credit facilities to farmers to expand business among other sundry reasons.
Nowadays it will be very difficult for any new farmers’ credit scheme to succeed and be credible notwithstanding the good intention because farmers have been disappointed and deceived several times. Many farmers’ groups have been destroyed and disbanded because of the inability of members to obtain loans despite their leaders good efforts to organize them and satisfy all conditions for credit access from government agencies, yet to no avail.
Loans to medium and small scale farmers should still be properly channeled through their associations and cooperatives in their local government areas to avoid giving money only to big time farmers, politicians and hangers on.
The mass media as watch dog should be able to monitor, not only reporting the various over publicized agricultural credit schemes, but revisit the schemes to ascertain the authenticity of the loans and verify from some of these beneficiaries, while the NGO’s in food security advocacy should monitor budget allocations and implementation on agriculture, processes of access and repayment of agricultural loans. But because of media orientation in Nigeria which gives premium coverage to politics and politicians and often ignore crucial developmental issues due to the structure of ownership and control mechanism, governments and their agencies saddled with responsibilities of developing agriculture failed woefully to deliver on their promises.
Since the right to food is fundamental human right of every one, any responsible government should facilitate the processes of mass production of, and peoples access to food and this can better be facilitated when farmers, particularly in the peasant and medium scale bracket have unlimited and timely access to revolving agricultural credit facilities with less noisy media propaganda of some of these loan programmes.
Adeola Soetan
Project Executive
Feed Nigeria Initiative (FENI)
fenitiative@yahoo.com
08037207856
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