Poor funding, govt policies affect agric business — AFAN president

Lack of access to finance is a great factor affecting farming in the country, what is AFAN doing on that? We tried to assist where it is glaringly possible; that is if we are recognised by government in policy formations we shall now be of help to the farmers because we know the problems. Like […]

Lack of access to finance is a great factor affecting farming in the country, what is AFAN doing on that?
We tried to assist where it is glaringly possible; that is if we are recognised by government in policy formations we shall now be of help to the farmers because we know the problems. Like the government of the day, like it did in the commercial agriculture scheme under NEPAD, we raised N200 billion through the CBN to commercial banks and they have been giving loans to farmers. We were there in the policy from the beginning in 2009 when it came on board, now the government is making available N220 billion for Small and Micro Enterprises and our farmers can also key into that. If government in its wisdom recognises our role, we can encourage the evolving of another window, single digit loans to farmers which will go a long way in helping our economy.
If you look at what is happening to oil today, our best bet is to harness whatever potential we have in agriculture. Stakeholders are very keen to advise government to always make available financing to farmers. This is not to say the farmers will not make effort to qualify to attract loans, we encourage them to qualify by forming groups or looking at what they do as a business by keeping very good accounts and records which will qualify them to access loans.
Don’t you think farmers setting up their Micro Finance Bank since commercial banks are not making it easy for them will be a way out?
When we were elected as AFAN officials in April 2014, we saw the need that at some point we will establish a micro finance bank for farmers in Nigeria. Something for us in the form of micro finance bank and I believe there are some efforts from some states, especially with the help from Fadama projects, to establish this type of banks. In Plateau and Bauchi states, our farmers are making such efforts. We have it in mind to establish it and if we are able to have it we can make whatever happens in the states as branches of the central farmers’ bank.
What is AFAN doing to encourage Nigerian farmers to improve in adding value to their crops?
You know the thing that is debilitating agriculture is selling your produce in their primary form. If you can be able to process your crop before selling, you are sure of getting more money and that is adding value to your produce. We are always proponents of processing but processing in Nigeria requires a lot of money and stable power. The way to go about it is to plead with government to enhance our energy potentials and to facilitate more financing to agriculture whereby processing plants can come and then farmers will be doing ideal farming business by processing their products and not selling them in primary form. If you sell them in primary form just like in cocoa, cotton and groundnut, we were exporting them in their primaries but paying a lot when we bring them back into the country in processed form, more than we sold them. This is why we are still where we are today. So anything to do, with value addition especially, is what we really stand for.
Can AFAN draw foreign investors to invest in crop processing in the country?
Look, it is a lot more than that, our policy from the government end has to encourage the advent of foreign partnership or investment that will bring about direct investment in processing. Let me tell you something about seed. There are some international and multinational seeds companies that have started talking with us and they are willing to come into this country to start producing seeds. They are now sensitising us on the need to have these improved seeds and we are already talking as their business show the potentials of growth; they will set up plants.
The cardinal thing we agreed on is that it is better to produce the seeds here than bring them in. This same thing will happen in all our commodities. Even where you look at the products being processed, once the business end of it is good, the companies will be coming to partner with us or wholly setting up in country. In fact, many farmers are already involved in processing but it may not be as they desired because of the debilitating problems of energy and finance.
Recently, some farmers suffered losses in cassava, wheat and some crops and no compensation was paid to them. Is AFAN intervening on this?
I cannot say anything about compensation from anywhere. If you look at agriculture as a business you will not be thinking in terms compensation. It has to be deliberate effort by government to give people a guaranteed minimum price for whatever they are encouraged to produce. If that works properly, you will not have even this glut. You mentioned something about processing, if people produce wheat and there is a plant that will process it, will there be a glut, No. You will not be talking of wheat but wheat products. So if you cannot process you will have glut but process products for Nigerians to eat and be self-sufficient.
But poultry farmers do get some compensation?
That is bird flu, a disease. Nobody buys your chicken because you have a preponderance.  No one compensates you for farming chicken, but if you have a scourge, that is devastating of course for you to go back to business you will be compensated. I believe this government is paying compensation for egg-laying birds so that people can return to business.
Can AFAN stand as a guarantor for farmers to access loans?
Well we can, but it is a two-way matter; if you look for proper collateral, it will mean you either have property or assets or liquidity that will guarantee a commercial loan but if you want a reference that is where we come in. As a group, AFAN can introduce its members to any financial institution to obtain loan. Because we believe they are doing what they claim to be doing, we can give such support without any responsibilities financially. But if we give a bank a guaranteed statement that we are guaranteeing your loan when we have nothing to pledge, what will make that bank agree to give? Currently we don’t have any assets, no money but as far as our association is concerned, an affiliated body can come and request us to attest to that fact to enable them process a loan from a financial institution for our member. We will readily do that on condition that we will have no financial obligation should they fail to pay up or fulfill their part of the agreement.
What is the way forward for agriculture in Nigeria?
The way forward is to invest properly in agriculture; the proper ways is for government from the agreements reached in Maputo, the declaration made there we were supposed to dedicate 10 percent of annual budgets to agriculture. In fact, Nigeria needs to dedicate about 20 percent to agriculture in order to restore its glory and dignity. If you take a person like me, I went to school from primary to secondary in 60s – 70s most of what happened to us then was thanks to agriculture, there were so many incentives, there was no oil money. It was when we saw the quick money from oil that we relegated agriculture to the background and this is where we are today.
Agriculture is relegated to the background; the only way out is to take agriculture to replace our oil by investing properly into it. Government should lead the revolution, then the private sector through the creation of enabling environment, for agric business to strive. I will make a plea to government to please consider that everybody in Nigeria is a potential farmer, 80 percent is employed, we have no other industry apart from agriculture.