Rice Production: 300,000 Farmers To Enjoy FG Loan ...Prof. Danbala Danja

The Managing Director of Bank of Agriculture Prof. Danbala Danja has
 disclosed that about 300, 000 rice farmers in thirteen States will
 benefit from the Central Bank of Nigeria’s Anchor Borrowers Programme.  He stated this in an interview with some journalists in Kaduna, his however optimistic that the assistance will go a long way in reducing exportation of rice and cost, Lola SERIKI- IDAHOSA was there for trace reporter

Q. Professor, you came from AFDB and now managing BOA, any difference?

The African Development Bank 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 base 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 and the AD has over 78 countries and here of course, we have largely Ministry of Finance and the Central Bank as the main share holders the two are wide afar, but there is something common to them, which is that, they promote agriculture development and financial enclosure.

How far is the Anchor Rice Programme?

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 up with an anchor borrower programme and the bank of agriculture.

In the case of Kebbi we have pilot programs 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 which is more than 42 years of existence and has more than 137 branches all over 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 is 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. Now, not all the 75,000 farmers we targeted collected the average amount of N210,000 per hectare because some of them had their water pumps or other inputs. But on the average each of the farmers was targeted to receive N210,000 in estimated cost of cultivation of a hectare of paddy during the dry season. Now, having expended nearly the N12billion with the average productivity per hectare of 45 you could then multiply; we targeted to have more than 300,000 metric tons of rice being produced over the dry season period.  And then we now have plans because of the success of the pilot scheme in Kebbi, the Federal Government directed that we work closely with the Central Bank of Nigeria to target about 13 states in the anchor rice programme as well as in wheat production, tomato and other staple crops.

Primarily, for now the focus is on rice to help achieve the current objective of self sufficiency in domestic rice production in about 1-2 years which President Muhammadu Muhammadu Buhari has promised the country. The Bank of Agriculture (BoA) is the main implementing agency. We have our staff, and are being spread all over the country particularly in the 13 states of the federation targeting different heritage farmers to achieve domestic sufficiency in rice and other crops. Because each had been based on comparative advantage to chose like two crops and we are applying, for instance in a couple of weeks, we are targeting about 300,000 farmers that would be supported under the anchor rice programme to produce paddy. We are entering into some agreements with off-takers in some cases largely private sector millers, and in some cases state governments as such.

Q. 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, traditional rulers we are targeting to recover 100 percent the amount we expended during the dry season.

Q. Sir, you made mention that the programme is meant for small scale farmers, how do you ensure that the big time farmers do not highjack the programme?

Excellent! 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 biometric and in addition to that we issue them with BVN so that we now have the identity of the farmers. The target is for the small scale farmers who are 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 Bank of Agriculture 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. Like I have said, there is a rigorous identification system which requires farmers to register with our branches, and they had to have BVN before they could be given the input in terms of seeds, fertilizers as well as working capital. Thus, this far it has been quite successful that’s why we’re trying to replicate it in other parts of the country.

Q.  How has the programme being received in crises prone areas 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 sat down from the lessons we learnt in Kebbi; we’re now strategizing 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 seed given to them as well as better agronomic practices they now could 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.

Sir, you talked about measures to avoid diversion of funds, how do you prevent diversion of produce?

I think this is a very good question, like I said, in the past people would have been given N210,000 per hectare, go and buy your inputs, do 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 represented by RIFAN (Rice Farmers Association of Nigeria), and the off-takers, so that we identify who is the farmer, and the inputs. We’ve got quality inputs and other seeds company that supply farmers with high quality inputs and this way, we don’t give money, we give largely 4/5 of the money is 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 largely about 1/5 of the amount, which is for land clearing, preparation, weeding and transport. And that amount of money is being given, the money is also trenched we don’t give all at a go there are kind of 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 don’t simply distribute the money and inputs and so go. No, we kind of identify the different stages which are about three to four that we release the inputs to farmers.

Q. How do you curb diversion of produce sir?

This is a good question, 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, the off-taker will pay the farmers 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 report of side selling where some of the farmers deliver a portion of the paddy to off-taker but they tried to sell to other buyers.

Now, that's a small amount compared to others, and we should expect that because one of the issues in this kind of programme is that other buyers pay higher than the off-taker’s price because of the ban on importation of rice which is good for the farmers; it has created a lucrative opportunity for farmers now to have higher price for their paddy. Now, that could also forced tension between the off-takers and other buyers who may want to offer higher price than the off-takers. But most of the off-takers have generally tried to increase the prices they offer to farmers in this way then you could see that the opportunities created by the anchor borrowers programme should be sustained. We have heard like the, Kebbi State government for instance the collection centres 73 in all allows farmers to sell at a much higher prices thereby eliminating some of the opportunities created by the gap between the off-takers price and what is being offered by other off-takers who buy the paddy from the farmers.

So, essentially, we have in place a structure that is workable, but we also employ the services of security like the police as well as traditional rulers to ensure that farmers deliver the produce at the collection centres. We would want some enactment of laws probably to make sure that side selling is reduced to the barest minimum; because with side selling, revenue to the government is also being undermined, and if you like, the profitability of the programme is also being undermined. We better have a structure production system whereby farmers have guaranteed market and off-takers are guaranteed the produce so that the lending capacity is optimized.     

Q. Do you think this programme is sustainable?

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 would hope that the federal government would 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 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 I mean a more appropriate value for the Naira; it is good for farmers because instead of importing you’ll 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 that we need high yielding seed varieties of rice and we also need to provide the irrigation, transport infrastructures as well as more especially the capacity existing rice mills 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 to other countries in less than two years.

Q.how do you select farmers, how do you get to them?

Excellent!  I think what we’re doing is there would be more communication, publicity one of this is through this interaction to bring to the attention the general populace, that look 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, rice farmers association that there’re opportunities to partner with BOA in keys staple crops like rice, wheat, sugar, soya beans as well as livestock and fisheries are here now. That government is funding BOA and that we’re prepared to scale this 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 in order 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 they could apply and we’ll support them.  The figures I have with me here is a list for about (shows to journalists) 13 different states and we want to make sure that farmers are availed to this opportunity.  We want to use all the media – electronics, social media etc to highlight this opportunities.

How much are giving out in the project?

Ok! Like I said, we started just during the last dry season now is like we have applied, 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 hectares you could 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 state. 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.

Is it only dry season farming programme?

 No it is not, like now, we have started with dry season, 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 going to be both wet and dry season farming.