Experts suggest ways to ease farmers’ access to finance

February 16, 2021

EXPERTS have said that appropriate coordination of funds channeled towards agricultural value chain by various financial institutions will ensure increased and quality agricultural production in the country.

Speaking at a capacity building workshop for effective coordination of agricultural finance stakeholders in Nigeria, organised by the Agricultural and Rural Management Training Institute (ARMTI), the executive director, ARMTI, Dr. Olufemi Oladunni, said that farmers are continuously complaining especially about the interest rate and their inability to access some of the agric funds.

“Finance is a major factor in agriculture in terms of production, processing, and marketing, but our farmers are continuously complaining, especially, about the interest rate among other associated financial challenges.

“We conducted a study 2018 and discovered that there is lack of coordination among the stakeholders in the agricultural financing sub-sector and we believe that if there is a coordination, we could bring down the price that goes to agriculture because with proper coordination, we can pump up money to fund agriculture and as a result when there is enough supply that can take care of the demand, the price stability in the agricultural credit market will be achieved and farmers can now plan to access credit, to develop, manage, and build their production along the agricultural value chain.

“The essence is to bring the farmers up from subsistence production to a business component of the economy. My expectation is that if we can reach this collaborative step, we will be able to bring up farmers for increased productivity and quality production so that they can compete at the international and local market and they will be able to raise their standard of living, reduce poverty, provide quality employment for the unemployed, etc”, he said.

Also speaking, an expert in agricultural research management and one of the resource persons at the workshop, Professor Oyedipe, said that one of the biggest problems with Nigeria’s agriculture is organization and management.

“We are using Kwara State as a template to try to find out what is the problem with Nigeria agricultural lending services because a lot of money has been going into agricultural programmes as loans, government interventions, grants from development partners and I think Nigeria is one of the largest recipients of grant from outside the country and the money that government put into agriculture can be better utilized if we better coordinate the services in agricultural management.

“So, right now, we have been able to identify that coordination among the several agencies giving agricultural promise to farmer is a critical problem because we think that the lenders of these farmers activities should coordinate more to have a common fund in terms of dealing with their problems, share experiences, share information, share constraints that they have so that they can have better strategies for dealing with these farmers. We decided to use Kwara State as an experimental ground, invited all the financial institutions and shared the results of the research we had conducted earlier on, which identified that coordination in other part of the continent like Eastern Africa, Western African, and Southern African, there is a lot of coordination among the lending agencies with Morocco, Zambia, Southern Africa, and Kenya as examples.

“The governor of the Central bank of Nigeria has put agricultural finance on the front burner. The minister of Agriculture has also keyed into all these activities. The two of them working together. But I think we need better coordination at the level of organization and managing the funds and that is why we are here. The result of our experiment in Kwara will determine what we would recommend to the federal government with ARMTI driving the process.

“The Nigeria farmer in the remotest part of Nigeria have no infrastructure, no facility, no water, no light, even the financial resources we are talking about hardly reach them, no internet network so they can hardly access these financial services. I think we need better approach to reaching them. Reaching the farmers is a critical component of agricultural development. If we must grow Nigeria agriculture, the small holders that are in this remotest areas must contribute to agricultural development but we cannot rely on armchair farmers;

people who have big money but are not operating efficiently. So, we think that we need the big time farmers to provide infrastructure and facilities to bring up the small holder farmers. In agriculture, you need incremental development; the small farmers will grow into the medium scale farmers, the medium scale farmers will grow into large scale farmers. That is how it happens all over the world if you want agriculture to grow”, he said.

One of the agric finance stakeholders, Dr. Ibrahim Ageh, the business manager of First Bank Ilorin Branch and the class governor for the programme, said that the workshop would help coordination among stakeholders, and ease access to agric financing for the farmers.

“You know finance is the major key. When you ask the big and small scale farmers about their challenge, it is finance. I am sure this programme will channel a way that will be easy for the farmers to access fund at cheaper rate and without bottlenecks”, he said.


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