Nigeria apex bank, the Central Bank of Nigeria (CBN), has announced additional incentives to smallholder farmers under the Anchor Borrowers Programme (ABP).
Speaking at the launch of this year’s Dry Season Farming, CBN Director, Development Finance, Philip Yusuf, said, the additional incentive will have the CBN increasing its collateral guarantee to 50 percent up from 25 percent, while slashing farmers risk portfolio from 75 to 50 percent.
The step according to Yusuf is expected to boost production and ensure food security in the country, while checking inflation tide. The development is aimed at ensuring that farmers increased their productivity level to lower the component of food import into Nigeria.
Yusuf told stakeholders, comprising maize, wheat, rice, and cassava farmers and processors in Nigeria, that the CBN was willing and open to suggestions that would help eliminate their challenges to boost productivity.
“I wish to welcome you all to this grand occasion with the primary objective of massive financing of farmers for the 2020 dry season cultivation as part of the bank’s intervention on some focal commodities. I am indeed excited about this meeting as it is very apt at this crucial period of our economic development, given the recent happenings in the country, including the COVID-19 pandemic, which you are all aware of.
READ: Detailed Guide On Accessing CBN Anchor Borrowers Programme (ABP) Intervention For Agriculture
“Let me share some background on the ABP. The ABP emerged in 2015 to create a linkage between anchor companies involved in the processing and smallholder farmers (SHFs) of the key agricultural commodities. It is primarily used to finance farmers in groups and associations so that they will have all the inputs needed by them to reap bountiful harvest.
“The programme thrust of the ABP is the provision of farm inputs in kind to smallholder farmers to boost production of these commodities, stabilise input supply to agro-processors and address the country’s negative balance of payments on food. At harvest, the SHFs supply his/her produce to the agro-processor (Anchor), who pays for the produce. The Anchor selected is mostly a private large-scale integrated processor, who has entered into agreement with the SHFs to off-take the harvested produce at an agreed price. Anchors could also be commodity associations or state governments having met prescribed conditions as set out by the ABP guideline.
Yusuf claimed that with the advent of the ABP, the programme had lifted thousands of SHFs out of poverty, and generated millions of jobs for unemployed Nigerians. The programme has been characterised by using high-quality seeds, the establishment of off-take agreement, which guarantees a ready market for farmers at agreed market prices.
