January 19, 2020Agric Digest
Agricultural activities intensified in 2019 due largely to increased rainfall experienced in most parts of the country. However, a few cases of flooding were recorded in some parts of the country, which destroyed farm produce. Farming activities were centered majorly on the harvest of agricultural produce during the third quarter. In a bid to curb the farmers/herders clash and ensure a well-integrated meat/dairy industry, a pilot phase of the Livestock Transformation Plan was flagged off in Adamawa, Benue, and Kaduna, Plateau, Nasarawa, Taraba and Zamfara states. The Plan was targeted at supporting the development of the country’s livestock sub-sector. Among other activities, the Government and CBN buttressed its present activities in enhancing agricultural productivity in Nigeria. Some of them include:
The ABP which was designed to finance smallholder farmers and create an economic linkage between them and commodity processors/millers took a better turn in 2019. Under the CBN development finance functions to continue to seek ways to support operators in the agricultural sector in order to create job opportunities and help preserve foreign exchange (forex) revenues. In the first half of 2019, N26.67 billion was disbursed to 237,967 smallholder farmers, compared with N36.37 billion disbursed to 155,732 farmers in the corresponding period of 2018. This represented a decrease of 36.4 percent in amount disbursed, but an increase of 52.8 percent in the number of smallholder farmers under the Programme. Furthermore, the area under cultivation increased from 155,732 hectares in the first half of 2018 to 259,086 hectares in the review period, representing an increase of 66.4 percent.
Products financed included: cassava, cotton, maize, rice, soya bean, tomato, wheat, poultry, cattle, and fish. From inception to end-June 2019, N201.97 billion had been disbursed through nineteen (19) Participating Financial Institutions (PFIs) to 1,140,854 farmers, involved in seventeen (17) crops, livestock and fishery activities. In addition, a total of 255 private and fourteen (14) state government anchors had participated from inception in 2015 to end-June 2019. The ABP was also one of the reasons why the non-oil sector’s contribution to the country’s Gross Domestic Product figures released recently by the National Bureau of Statistics.
Agricultural Credit Guarantee Scheme:
A total of N1.21 billion loan was guaranteed to 9,752 farmers under the Agricultural Credit Guarantee Scheme (ACGS) as in the third quarter of 2019. This represented an increase of 41.7 percent above the level in the preceding quarter but was 14.6 percent below the level in the corresponding quarter of 2018. Sub sectorial analysis showed that food crops received the largest share of N595.5 million (49.0 percent), mixed crops got N221.8 million (18.3 percent), while livestock had N174.5 million (14.4 percent. Cash crops, fisheries and ‘Others’ got N106.5 million (8.8 percent), N84.4 million (6.9 percent) and N31.5 million (2.6 percent) respectively. Analysis by state, showed that 34 states and the Federal Capital Territory benefited from the Scheme in the review quarter, with the highest and lowest sums of N142.9 million (11.8 percent) and N2.6 million (0.2 percent) guaranteed to Adamawa and Jigawa states, respectively.
Commercial Agricultural Credit Scheme (CACS):
The Scheme was established to fast-track the development of the agricultural sector by providing credit facilities to commercial agricultural enterprises at a single-digit interest rate and promoting low food inflation. It also has a non-interest component that aligns with the principles of Islamic finance.
A total of N4.84 billion was disbursed to five (5) banks for six (6) projects under the Scheme in the first half of 2019, compared with N39.34 billion disbursed to eight (8) banks for sixteen (16) projects in the first half of 2018. As at the end-September 2019, the total amount released, since inception by the CBN under the Commercial Agriculture Credit Scheme (CACS) to the participating banks for disbursement, amounted to N610.4 billion for 593 projects.
Paddy Aggregation Scheme (PAS):
The Paddy Aggregation Scheme was a short-term bridging facility introduced in 2017 to enable rice millers to purchase paddy for all-year processing. The sum of N35.20 billion was released to seven (7) banks for twelve (12) projects in the first half of 2019, compared with N4.25 billion released to three (3) banks for three (3) projects in the corresponding period of 2018. This brought total disbursement to N88.83 billion for 25 projects, at end-June 2019.
Micro, Small and Medium Enterprises Development Fund (MSMEDF):
The Fund serves to channel affordable credit to MSMEs, especially, women entrepreneurs, to create jobs and enhance productivity. In the first half of 2019, N625.55 million was disbursed for 1,103 projects, compared with N4.77 billion for 14,492 projects in the same period in 2018. This showed a decrease of 92.4 and 661.7 percent in value and number, respectively. Cumulative disbursement from inception in 2013 to end-June 2019 was N85.70 billion for 216,989 projects. Of this amount, state governments accessed N58.23 billion (67.9%), while MSMEs (private sector) collectively accessed N27.47 billion (32.1%).
Agri-business/ Small and Medium Enterprises Investment Scheme (AGSMEIS):
In the first half of 2019, N1.29 billion was disbursed to 595 projects, compared with N111.81 million to 353 projects in the same period of 2018. Aggregate disbursement from inception in 2017 to end-June 2019 was N1.74 billion for 1,111 projects.
Real Sector Support Facility (RSSF):
This was established in 2014 to provide financing to large-scale enterprises with high potentials for growth, increase accretion to foreign reserves, expand the industrial base and diversify the economy. In the first half of 2019, N40.00 billion was released for one (1) project, compared with N23.91 billion for five (5) projects in the same period of 2018. Cumulatively, N157.51 billion had been disbursed to twenty-four (24) projects from inception to end-June 2019.
Presidential Fertilizer Initiative (PFI):
The Initiative was introduced to increase the production of nitrogen, phosphorus, and potassium (NPK) fertilizer by local blending plants. This was expected to enhance fertilizer availability and affordability, with a view to improving farmers’ productivity and creating jobs. In the review period, no disbursement was made under the Initiative as at the 3rd quarter, in contrast to N20.00 billion disbursed for three (3) projects in the first half of 2018 and N10.00 billion for one (1) Project in the preceding period of 2018. Cumulatively, from inception in 2016 to end-June 2019, N35.00 billion had been disbursed for five (5) projects, through the Nigeria Sovereign Investment Authority (NSIA), the managing agent of the Initiative.