Exactly nine months after the National Agricultural Development Fund (NADF) bill was signed into law, industry players and stakeholders in the agric sector have expressed worry over the continuous delay in the release of the take-off grant.
Signed into law by former President Muhammadu Buhari late last year, the NADF is aimed at giving critical financial support that would facilitate rapid and sustainable growth in various aspects of the nation’s agricultural sector for the benefit of all citizens.
Though it was approved by the upper and lower arms of the National Assembly on July 27, 2022, it was signed into law in December 2022. One of the functions of the fund listed at section 8 in Part II of the Act is the provision of money “to support agricultural development in Nigeria taking into consideration the need for food production and food security in Nigeria, in all its ramifications, including crop production, livestock, fisheries, poultry and agro-forestry.”
Other parts of the functions include – provision of money to support agricultural development taking into consideration food production and food security in all ramifications. According to its structure, the NADF would be funded from the derivation from 0.5 per cent of natural development resources fund and five per cent of the duty levied on import of rice, wheat, sugar, milk, poultry and fish.
If all the functions were implemented with the desire to achieve the purposes of the fund, it is expected to boost agricultural activities, which will raise productivity and ultimately deepen food security for over 200 million Nigerians.
But, the delay in releasing the take-off grant, especially in the face of the current high cost of food and challenges faced by farmers is raising many questions on what is amiss.
The Chief Executive Officer, Renee Golden Multi ventures, Adenike Apeji, lamented that insufficient access to funding stands as a persistent and deeply ingrained issue adversely impacting the agricultural sector, relegating farming primarily to subsistence levels.
“This chronic lack of financial support significantly inhibits the sector’s growth. Regrettably, the agricultural industry carries inherent risks that deter many financial institutions from providing loans to farmers, often further dissuading them through burdensome interest rates.
“For farmers, meager personal savings become the unfortunate source of livelihood funding, further underscoring the acute necessity for adequate financial assistance. Government interventions have traditionally been the beacon of hope for farmers, yet delays in the disbursement of these funds perpetuate the deteriorating state of the agricultural sector, leading to severe food shortages.”
She noted that the consequences of funding inadequacy extend to compromised quality of inputs purchased by farmers, amplifying the sector’s challenges.
“Of grave concern is the profound impact on inflation, particularly food inflation, a pivotal component of headline inflation. The inadequate financing of the agricultural sector contributes to a spike in food prices, unsettling the broader macroeconomic landscape. In the aftermath of the recent fuel subsidy removal, it becomes increasingly imperative for the government to swiftly implement pending policies that assuage the predicaments faced by its citizens, particularly in a sector that constitutes employment for more than 60 per cent of the nation’s population.
“In the light of these critical circumstances, the imperative for an immediate and substantial improvement in funding access for the agricultural sector cannot be overstated. Addressing this financial deficit will not only fortify the sector but also drive economic stability, ensuring food security and bolstering the nation’s overall economic resilience.”
Apeji disclosed that the NADF, if executed effectively, holds the promise of ameliorating the persistent issue of inadequate funding within the agricultural sector. “This strategic infusion of funds directly into the hands of bonafide farmers can catalyse a series of positive transformations.
On his part, the Executive Director and Chief Executive Officer, Agricultural and Rural Management Training Institute (ARMTI), Ilorin, Kwara State, Dr. Olufemi Oladunni, said the NADF should provide funds for the implementation of agricultural policies, on lending to farmers, especially smallholder farmers at single digit interest rate, and also source for funding relevant agricultural institutions and corporate organisations within the Agriculture Research for Development (ARD) sector.
“The release of the fund will stimulate all the components of agricultural value chain, including both the primary and secondary actors. Also, all the various support institutions will be activated. This will now lead to increased production and productivity and vibrant marketing activities. The resultant effects are employment generation, increased income, and poverty reduction.”
But the Chief Executive Officer of Green Sahara Farms, Plateau State, Suleiman Dikwa, who differ on this, said the non-release of the fund is immaterial if it is going to go the same route other similar funds have followed.
“We are short of all sorts of interventions, so I am not excited. We have the Central Bank of Nigeria itself, assuming the functions of commercial or development banks – Nigeria Incentive-Based Risk Sharing system for Agricultural Lending (NIRSAL), National Agricultural Land Development Authority (NALDA), Bank of Agriculture, Bank of Industry, so clearly it is not lack of funds in the sector that we need intervention.
“Aside the issue of corruption and nepotism, we have the issue of approach to interventions, which I have argued severally that it does not fit the context and therefore the lack of success.
We have similar funds for the mining industry, the natural resource development fund, which has had no impact in the sector.
“If the funds are released and the manner of disbursement moves to retail directly within and among farmers in the communities with big investment in extension workers who are tied to an end to end industrial clusters, then it will have an impact because the vertical and horizontal value chains are involved in the industrial aggregation far removed from farmer aggregation.”
He noted that, “when you map according to needs and design of a programme from the perspective of users and not assumed solutions that the problem is only finance, then it will have impact.”
