Repositioning agriculture to boost productivity
The famed agricultural successes of the First Republic, symbolised by the groundnut pyramids in the north and the cocoa and palm plantations in the west and east were achieved on the back of robust policies and effective agricultural extension systems. But this second factor has not been given adequate emphasis in recent efforts to rejuvenate the sector. This is one of the reasons why a once food sufficient and food exporting country has become one in which only 20 per cent of the food consumed by its population is grown at home. The consequence of this is the current heavy dependence on imported food products to feed a teeming population which according to the World Bank, is expected to surpass the population of the United States which currently stands at 324,459,463, by 2050.
Many recommendations have been made to fix this existential economic challenge confronting Nigeria. However, the consensus is that Nigeria must hike its food production substantially to keep up with that population growth. These are the core concerns of the Economic Recovery and Growth Plan (ERGP) and the Agricultural Promotion Programme (APP) of the Buhari administration which are designed to tackle rising food imports and declining levels of national food self-sufficiency. In this connection, key challenges that undermine agricultural production include reliance on rain fed agriculture, smallholder land holding, and low productivity due to poor planting material, low fertiliser application, and a weak agricultural extension system amongst others. Aliyu Abdulhameed, MD/CEO of the Nigeria Incentive-Based Risk Sharing System for Agriculture (NIRSAL), believes that establishing an effective modern agricultural extension service to support the ERGP and the APP is key to the revitalisation of Nigerian agriculture. And this is the vision behind NIRSAL’s game changing Project Monitoring Reporting and Remediation Offices (PMRO) scheme launched in 2017.
He explains the thinking and focus of the scheme: “The PMRO structure is very critical to our operations. Agriculture is a field business. The PMROs would act as our eyes to ensure that agricultural projects that we facilitate finance for are executed in line with agreed terms and also serve to extend the reach of our interventions”.
Achieving this will not be easy. Previous efforts by successive administrations to repeat the agricultural extension feats of the 60s-70s and reduce the over-reliance on imports, have not been very successful. One challenge is that Federal and State governments still struggle with attracting investment to the sector, hence low agricultural budgets continue to hamper efforts to grow the sector significantly despite numerous colourfully advertised programs. The sector also struggles with outdated practices, inefficient technologies and weak monitoring. For each of these challenges, NIRSAL has responded with a robust structure to tackle the negative effects sustainably and the PMRO scheme is the latest in the battle to boost agricultural productivity and food security. NIRSAL itself is a product of government’s efforts to properly organise and fund the agricultural sector, reduce the risk of investing in the sector, while seeking areas of new funding for the sector to grow. With the coming of the PMROs, players in the sector can now expect to have at their disposal modern best practices in planting, processing, packaging and even in funding. As a result, inefficient technologies are systematically done away with while the sector benefits from the specialised monitoring the scheme brings with it.
The PMRO structure which already covers 225,000 farmers is set to boost the status of agriculture as a business and a sector capable of earning huge foreign exchange to add to the coffers of the national treasury. To improve the chances for success, the PMRO scheme is fashioned to be a formidable ally to all stakeholders along the agricultural value chain chiefly the smallholder farmers and investors, providing robust all-round support for all parties. Another strong feature of the scheme is a focus on capacity building anchored on Good Agricultural Practices (GAP) such as effective production, safe processing and sustainable post-production techniques, including equipping the smallholder farmers with the technical and business knowhow required to operate modern technologies and attract the requisite funding for projects as well as supervising funded projects. The farmers work with the PMROs from conception to actualisation of their projects, learning how to produce food products that meet global standards, through modern planting techniques and efficient use of farming resources such as fertilisers and pesticides. The PMROs will also assist them with business development, helping them attract the kind of funding required for their projects, from the right financial institutions.
On the other hand, the PMRO scheme will play the roles of liaison, eyes on ground and facilitator to the agricultural projects that it supports, including those to which STANBIC IBTC and Union Bank have already collectively committed N20 billion. In fact, Abdulhameed sees the PMRO scheme as a first-line defense and security to ensure that rigorously conceptualised and technically sound agricultural projects achieve their objectives. As Abdulhameed noted when NIRSAL signed an MOU on a N10 billion agricultural finance scheme in November 2017, “To ensure the proper use of the loans and success of the projects, NIRSAL will leverage its Project Monitoring, Reporting and Remediation Offices (PMRO) located across the 36 states in the country. The PMROs will closely supervise projects to ensure proper use of the loans by beneficiaries.” With such investments already coming into the programme, the PMRO scheme’s multifaceted approach to agricultural extension systems places it at the epicenter or epicentres of agribusiness in Nigeria, as they operate from all 36 states including the Federal Capital Territory.
The investors/financial institutions, working hand in hand with the PMROs as part of NIRSAL’s risk management framework, for handling investments in agriculture, will serve as supervisor and monitor to ensure strict adherence to terms agreed with beneficiaries, and as a result reduce the risk of doing business in the sector. Some of the risks include but are not limited to loan diversion. To help deal with this, the PMRO structure will complete NIRSAL’s institutional strategy of only providing inputs in lieu of cash to farmers by physically ensuring that they are rightly deployed and that timelines for projects are complied with. It is also a good thing that NIRSAL has empowered them with the technology tools for remote monitoring and reporting of events as they occur on the field for appropriate steps to be taken, when there is a need. The scheme’s close progress tracking feature also enables NIRSAL to identify risk events, take steps to mitigate them to avoid loss. A critical part of the PMRO scheme is the leadership it has at state level, which enables it to effectively carry out this tracking and feedback system. Led by financial experts mostly from the private sector and senior level former directors from the public service, these PMRO Heads leverage their private sector experience and technical knowhow in agribusiness to play very vital roles at the points where they are most needed. These include providing technical support, mentorship, business advisory services such as writing business plans and financial management to agricultural players operating at the state levels.
Overall, the introduction of the PMRO structure into the Nigerian agricultural space by NIRSAL under the leadership of Abdulhameed is timely, necessary and commendable. It is a physical evidence of the institutional efforts by the risk-mitigating agency to win the confidence of commercial banks who see putting money into agriculture as a sinking it into a dark hole. Its nationwide presence and trained field staff, ability to monitor agricultural projects, track and report risk events, guide and support agricultural producers help fill a worrying gap left by the extension services of old. The institutional role of enabling access to relevant information by grassroots agricultural players makes them highly relevant in government’s efforts to increase farmer yield, boost productivity and reposition agriculture as the mainstay of the country’s economy. The management of NIRSAL deserves commendation and should be supported by stakeholders to ensure its sustainability and impact as a pillar of the Buhari administration’s agricultural promotion policy.
Nantim T. Joseph is a public policy analyst