The push to guarantee food security in Nigeria got a boost on Tuesday as the Nigerian Incentive-based Risk Sharing System for Agricultural Lending (NIRSAL) has secured a N4.5 billion facility from three commercial banks towards supporting smallholder farmers across the country.
The facility was pooled by Stanbic IBTC, Union Bank and Sterling Bank under the Mapping-to-Markets (M2M) strategy; a sustainable smallholder inclusive approach towards agricultural transformation in Nigeria.
Speaking at a workshop involving key actors in the maize and soybean value chains, the Managing Director of NIRSAL, Mr Abdulhameed Aliyu also revealed that nine states in Nigeria have already completed soil mapping in their domains, assuring that the agency will fund the project across the remaining states in Nigeria as part of its technical support; especially now that hybrid seeds are available.
The soil mapping compliant states are; Oyo, Ogun, Lagos, Kebbi, Ebonyi, Taraba, Kwara, Niger and Benue.
Aliyu also revealed that plans were afoot to end seasonal farming in Nigeria as NIRSAL was developing solar powered irrigation system that can water 300 hectares of farmland in a location for farmers across Nigeria.
He said: “NIRSAL’s mandate to fix broken agricultural value chains, facilitate finance and build long-term capacity cannot be achieved without the alignment of interests of actors across relevant value chain segments towards ensuring increased productivity and increased financial returns in a manner that delivers inclusive economic growth and development.
“It is interesting to note that under this single pilot project and as a result of our deliberations and interactions, we have been able to extract significant commitments to be executed in this 2019 wet season:
3,750 hectares of brown-field farmland pledged by Benue, Niger and Ekiti states.
“N4.5 billion has been pledged in available funding to smallholder farmers by Stanbic, Union Bank and Sterling Bank under the M2M initiative.
“3,750 farmers will be supported across these three states.
107.5 metric tonnes of seeds worth approximately N65.5 million will be supplied by seed companies. 2,062 metric tonnes of fertilizer worth about N290 million will be made available by the fertilizer companies.
33,250 liters of crop protection products worth N54.6 million committed. 8,750 Metric Tonnes of maize with a market value of N744 million and 2000 metric tonnes of Soybean worth N208 million will be produced and off taken under this pilot phase.
“Downstream actors present have committed to off-take the maize and soybean produced.
A revenue of N425,000 and N2260,000 will be generated by each farmer under this arrangement for maize and soybean respectively”, the NIRSAL boss explained.
He added that the pilot scheme will save the country about N1 billion via import substitution.
“This is in no way a small feat as the ripple effects on economic growth, employment and standard of living would be immense. This is the type of positive impact that NIRSAL was established to create, and we are determined to make it happen”, he noted.
Going forward, Aliyu said NIRSAL will facilitate the signing and implementation of long-term supply contracts/off-take trade agreements addressing pricing, quality, delivery, and payment terms, etc. between farmers agro geo-cooperatives and the downstream market offtakers.
“We will also facilitate the signing and implementation of a long-term supply and/or fee-for-service contracts between farmers agro geo-cooperatives and input suppliers, other upstream service providers for land clearing, irrigation, equipment leasing, tractorisation, mechanized harvest, etc. as well as other service providers along the value chain.
“Furthermore, NIRSAL will deploy its Credit Risk Guarantees on the financing tickets generated to provide comfort to financiers for loan disbursement.
“We will also deploy other robust risk management instruments including the Area Yield Index Insurance to safeguard yields at harvest, our boots-on-ground Project Monitoring, Reporting, and Remediation Office (PMRO) personnel in Ekiti, Niger and the Benue States and other risk management instruments to guarantee adequate returns on investment as and when due.
“The NIRSAL team will be in touch with all key stakeholders to ensure requirements are duly captured and interests fairly represented in the agreements and contracts for implementation.
“It’s worth noting that the current drive by the CBN to limit exposures of banks to Treasury Bills window, NIRSAL is making concerted effort to create highly de-risked agri-business investment environment as an alternative for bank lending”, he explained.