As part of measures by the Federal Government to tackle famine in 2017, the Central Bank of Nigeria (CBN) Tuesday disclosed plans to recapitalize the Bank of Agriculture (BoA) with about N750 billion to boost the agriculture sector and ensure food security.
The recapitalization exercise will enable the bank provide loans to the tune of Ntrillions for agricultural financing at a single digit interest rate to farmers, just as plans are on to relax duties on tractors and Agricultural equipment to encourage commercial farming.
Minister of State for Agriculture and Rural Development, Senator Heineken Lokpobiri who disclosed this in Abuja at a farmers’ Field Day workshop organised by Dizengoff Nigeria Limited in collaboration with Phinada Integrated Farms, stated that agricultural financing was one of the major challenges militating against mechanized farming, saying that with single digit interest, farmers will be able to take loans and go into commercial farming and increase their productivity.
He said, “The Central Bank of Nigeria is collaborating with the Ministry of Agriculture. This is because one of the biggest challenge of agriculture in Nigeria today is access to affordable loans. But in many other parts of the world, agriculture is the most attractive sector for banks to lend money to. So what do we do?
“As a ministry, we are planning to recapitalize the Bank of Agriculture. So we are to restructure the BoA and the CBN is committed to providing about N750bn. The BoA as an institution itself is going to attract hundreds of billions of naira and we think that before the end of next year, we should e able to attract at least NI trillion available credit to be lend to anybody who wants to do farming business.”
Lokpobiri continued, “Right now, the Federal Government is subsidizing farmerming but it is not subsidy that farmers want. We have seen this under the Anchor Borrowers Scheme of the CBN in Kebbi in that scheme there was no subsidy.
“What the CBN through the BoA did was to give each farmer between N110,000 and N130,000 to cultivate one hectare of rice farm. And if rice per tonne is between N60,000 and N80,000, then whoever adequately cultivates two hectares is already a millionaire” he said.
The minister also disclosed that the Federal Government intends to remove duties on the importation of tractors and other Agricultural equipment to ensure increase in productivity and as a step towards mechanized farming.