Danju: On domestic sufficiency in rice, we are poised to deliver in two years
Prof. Danbala Danju, Managing Director of the Bank of Agriculture (BOA), in this interview with Northern Bureau Chief, Saxone Akhaine, spoke on the activities of the bank, particularly with respect to promoting food security in the country. He also spoke on the Federal Government policies in turning the agricultural sector around to make it a foreign exchange earner
How far has the bank gone with the implementation of the Anchor Rice Programme, which is being promoted in Nigeria?
The anchor rice borrower programme is aimed at boosting domestic production. The Country has been importing rice and because of the scarcity of foreign exchange, attention is being focused on the anchor borrower programme, and the Bank of Agriculture has keyed into it. In Kebbi State, we have the pilot programme. And because some commercial banks did not consider this profitable, the Bank of Agriculture is the best place to be, which is the specialist agricultural development bank. The bank has been in existence for more than 42 years and has more than 137 branches covering 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, 75 percent of the farmers are into rice farming with about 98,000 hectares of land cultivated. 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 under the programme collected the average amount of N210, 000 per hectare, because some of them had their water pumps or other inputs. Now, having expended nearly N12b, our target is to have more than 300,000 metric tons of rice being produced over the dry season period. And because of the success of the pilot scheme in Kebbi, the Federal Government has directed that we work closely with the Central Bank of Nigeria to implement the anchor rice programme in about 13 states, 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 one to two years, which President Muhammadu Buhari has promised the country.
The Bank of Agriculture (BOA) is the main implementing agency. We have our staff, and they are 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. For instance, in a couple of weeks, our target is to bring on board about 300,000 farmers that would be supported under the anchor rice programme to produce paddy.
What are your plans to recover the loans?
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. Our target is to recover 100 percent the amount we expended during the dry season.
You made mention that the programme is meant for small-scale farmers, how do you ensure that the big time farmers do not hijack the programme?
Excellent. What we have done is that, we have farmers’ registration. All the farmers had to register with Bank of Agriculture. We collected 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 have an average hectare of one to a maximum of five 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 famers, 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 smallholder 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 far, it has been quite successful and that’s why we’re trying to replicate it in other parts of the country.
Sir, how has the programme been received in crises prone areas like the Northeast 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 that we need 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 five 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.
You talked about measures to avoid diversion of funds, how do you prevent diversion of produce?
Like I said, in the past people would have been given N210, 000 per hectare to buy inputs, do what they 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, that is 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 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. 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.
How would 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, 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 cause 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 and in this way then you could see that the opportunities created by the anchor borrowers’ programme should be sustained. 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 structured production system, whereby, farmers have guaranteed market and off-takers are guaranteed the produce so that the lending capacity is optimized.
Do you think this programme will be 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 hope 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 undermine 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. We need high yielding seed varieties of rice and we also need to provide the irrigation, transport infrastructures, as well as, expand the capacity of existing rice mills 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.
There are cases of farmers showing indifference to interventions like this, how do you select farmers, inform and educate them of such interventions?
Excellent. I think what we’re doing is that there would be more communication and 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. 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 agriculture 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 13 different states and we want to make sure that farmers are availed of this opportunity.
On the whole, how much is the Bank giving out under the project?
Like I said, we started during the last dry season and now I can’t give you the total figure. What we’re trying to do is that we piloted it 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, 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.