CBN through ABP Disburses N33.34bn to 146,557 farmers across 21 states

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……..Exporters of Indian non-basmati rice to Nigeria has lost N752.2 billion ($2.15 billion) due to CBN ABP policy


The Central Bank of Nigeria (CBN) said it established the Anchor Borrowers’ Programme (ABP) with a view to collaborate with anchor companies involved in the production and processing of key agricultural commodities.

According to the Governor of the Central Bank, Godwin Emefiele, “The fall in oil prices has given us a timely reminder that we have no choice but to diversify our economy away from oil, and into agriculture, manufacturing, services, and other non-oil sectors.

The ABP which was launched by President Muhammadu Buhari on November 17, 2015 was one of the CBN’s policy initiatives to pursue the aforementioned development objectives, namely the creation of jobs, reduction in food imports, and diversification of our economy. The programme aims at creating economic linkages between over 600,000 smallholder farmers and reputable large-scale processors with a view to increasing agricultural output and significantly improving capacity utilization of integrated mills.”

Emefiele believed the effort would close the gap between the levels of local rice production and domestic consumption as well as complement the Growth Enhancement Support (GES) Scheme of the Federal Ministry of Agriculture by graduating GES farmers from subsistence farming to commercial production.

“The programme is designed to help local farmers increase production and supply of feedstock to processors, reduce importation and conserve Nigeria’s external reserves. Under the scheme, anchor serve as off-takers in recognition of their track record and experience in working with out-growers involved in production.

The apex bank explained that the scheme involves a finance model whereby the anchor firms, CBN, Nigeria Incentive based Risk Sharing System for Agricultural Lending (NIRSAL) and state governments organise the out-growers and ensure that they comply with contractual terms thereby reducing the incidence of side-selling. The financing institutions will serve as veritable channels for delivering credit to the out-growers.

According to the CBN statement, it had disbursed a total sum of N33.34bn to 146,557 farmers across 21 states under its Anchor Borrowers’ Programme.

The apex bank in the statement said, adding that farmers who accessed the facility had started repaying the loans.

Out of the total amount of N33.34 billion so far released, CBN said, about N15.13bn disbursed to 73,941 farmers in Kebbi State had fallen due for repayment, with N7.11 billion or 47 per cent of the amount repaid and returned to the CBN.

The apex bank also noted that the balance of N18.20 billion of the 12-month tenured loans released to farmers in the other 20 states for wet and dry season farming had not fallen due for repayment.

CBN also disclosed that farmers in other benefiting states had also commenced repayment to the tune of N1.238bn.

The statement read in part, “Farmers who accessed under the CBN Anchor Borrowers’ Programme have indeed commenced repaying their loans.

“Details of the loan disbursement and repayment indicate that as of March 31, 2017, a total sum of N33.34bn had been released through 12 participating finance institutions in respect of 146,557 farmers across 21 states, cultivating over 180,018 hectares of land.”

The CBN noted that efforts were currently being made by the participating state governments to ensure that all outstanding loans were repaid by the farmers as soon as they were due before the commencement of the next dry season farming season.

This, it added, was to enable the CBN extend similar gestures to farmers in other states, which had indicated interest in participating in the ABP.

According to the apex bank, rice, wheat, maize, soya beans, cotton and fish have been cultivated by the farmers with appreciable yields achieved.
It said Kebbi State alone accounted for about two million metric tonnes of rice out of the estimated four million metric tonnes so far realised under the programme nationwide.

The ABP is designed to create economic linkages between farmers and processors, not only to ensure increased agricultural output of rice and wheat, but also to close the gap between production and consumption.

Under the programme, the CBN has set aside N40bn out of the N220 billion Micro Small and Medium Enterprises Development Fund to be given to farmers at a single digit interest rate of nine per cent per annum.

Under the scheme, smallholder farmers are entitled to loans ranging between N150,000 and N250,000 to assist them in procuring necessary inputs like seedlings, fertilizers and pesticides, among others, to help boost agricultural output and productivity.Indian Exporters Lose N753 billion

Already, the effect of the aggressive rice production in the country is been felt by exporters of Indian non-basmati rice to Nigeria. They lost N752.2 billion ($2.15 billion) of trade in Nigeria in the last one year.

For instance, it was learnt that export of the commodity fell by 85 per cent between April 2015 and February 2016. Nigeria is a major export destination for Indian non-basmati rice.

It was gathered that some 3.11 million tons of non-basmati rice valued at $2.15 billion were routed through Cotonou Port within the period which resulted the Nigeria Customs Service (NCS) to impose the ban of the commodity from land border.

Report by All India Rice Exporters Association (AIREA), linked the declined to dearth of foreign exchange in informal forex markets, which had adversely impacted payments. It noted that importation of Indian non-basmati rice, which found their way to Nigeria through Benin, has gone done sharply.

The report said: “Although it is a considerable reduction compared to a flat duty of 110 per cent that was imposed earlier, the differential duty along with a ban on rice import through the land border has had an impact on Indian exports to the country.

Last year, the two most important importers- Bangladesh and Nigeria, imposed restrictions on India rice last year. While Bangladesh imposed an import duty of 20 per cent, Nigeria imposed total ban.

Amehnews recall that in May 2014, Nigeria introduced a rice import policy, with a differential tariff regime for merchandise importers in a bid to achieve self-sufficiency by the year 2017.

Some importers were asked to pay higher duty of 70 per cent, while those with verifiable domestic investments in the local rice milling industry pay a lower duty at 30 per cent


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