Financing Smallholder Rice Farmers: A Field-Based Evidence Review of Anchor Borrowers’ Programme (ABP) Model in Nigeria
Abstract
Nigeria’s spending of US$2billion annually on rice importation has been considered a major source of foreign exchange drain and a threat to domestic rice industry. One of the major reasons adduced for this high import bills is the persistent demand-supply gap arising from the country’s inability to increase domestic output of paddy rice to optimize the total capacity of several integrated rice mills established across the country in the last 15 years. In 2015, the government launched the Anchor Borrowers’ Programme (ABP) to make cheap funds accessible to smallholder farmers (SHFs) who produce more than 85% of total farm output in Nigeria. ABP is designed to encourage banks to lend to SHFs to boost paddy rice production. This paper presents the field experiences of SHFs, banks and rice millers who participated in the programme in 2016/2017. This paper concludes that ABP is a laudable programme that can contribute in achieving the food security objective of the government. The key challenges found to be threatening the success and sustainability of ABP included delays in timely disbursement of funds by deposit money banks (DMBs), inadequate personnel and institutional framework, side-selling of harvested paddy rice by SHFs, State government undue involvement in the ABP, and poor rural infrastructure. Policy recommendations to strengthen the ABP model for improved impact were discussed.
Downloads
References
Adeyeye, J. A., Navesero, E. P., Ariyo, O. J. & Adeyeye, S. A. (2010). Consumer preference for rice consumption in Nigeria. Journal of Humanities, Social Science and Creativity Arts, 5(1), 26-36.
Agnet. (2004). Making farm credit work for the small-scale farmersâ€. http://www.agnet.org/library/nc/145b/ Accessed on February, 2017.
Alfred, S. D. Y. & Adekayode, A. B. (2014). Consumers’ attitude towards local rice production in Ondo State, Nigeria. Journal of Agricultural Extension and Rural Development, 6(7), 242-248.
Augustine, A., Jokthan, G., Zafari, I. & Bivan, G. (2013). Optimizing opportunities for sustainable development through organic agriculture in Nigeria. IOSR Journal of Agriculture and Veterinary Science, 4(1), 7-11.
Ayanwale A. B. & Amusan, C. A. (2012). Gender analysis of rice production efficiency in Osun State: Implication for the agricultural transformation agenda. Paper presented at the 13th National Conference of the Nigerian Association of Agricultural Economists Obafemi Owolowo University, Ile – Ife, Nigeria, September 25th – 27th
Bamiduro, J. A. & Rotimi, A. G. (2011). Small-scale farming and agricultural product marketing for sustainable poverty alleviation in Nigeria. Open Journal System, 7(3), 56-63.
Ben-Yami, M. (n.d.). Integrated of traditional institutions and people’s participation in an artisanal fisheries development project in south-eastern Nigeria. http//www.fao.org/DOCREP/004/Y1290/y1290e0e.htm Accessed on 17th February 2017
CARD. (2015). Private sector investment in the rice sector in response to government policies in Nigeriaâ€. Presentation at the 6th general meeting of the coalition for African rice development (CARD), November 18-19, 2015 Accra, Ghana. https://riceforafrica.net/images/stories/PDF/S2-2EN.pdf Accessed on 17th February 2017
CBN. (2005). Microfinance policy, regulatory, and supervisory framework for Nigeria. http://www.cenbank.org/out/Publications/guidelines/dfd/2006/microfinance%20policy.pdf Accessed 20th February 2017
CBN. (2016). Anchor Borrowers’ Programme Guidelines. Development Finance Department, Central Bank of Nigeria, Central Business District, Abuja.
https://www.cbn.gov.ng/Out/2017/DFD/Anchor%20Borrowers%20Programme%20Guidelines%20-DEC%20%202016.pdf Accessed 12th February 2017
CBN. (2017). Anchor Borrowers’ Programme (ABP). A report presented by ABP Unit of CBN during the meeting of CBN, Farmers and Anchors with the technical committee on food security held at CBN headquarters Abuja, Nigeria on 23rd February 2017.
Coker, A. A., Akogun, E. O., Adebayo, C. O. & Mohammed, U. S. (2018). Assessment of implementation modalities of the Anchor Borrowers’ Programme in Nigeria. Agro-Science Journal of Tropical Agriculture, Food, Environment and Extension, 17(1), 44 - 52.
Demont, M., Rutsaert, P., Ndour, M., Verbeke, W., Seck, P. A. & Tollens, E. (2012). Experimental auctions, collective induction and choice shift: willingness-to-pay for rice quality in Senegal. European Review of Agricultural Economics, 1–26.
Evbuomwan. & Okoye. (2017). Evaluating the prospects of the anchor borrowers’ programme for small-scale farmers in Nigeria. Paper presented at 21st International Farm Management Congress, John McIntyre Conference Centre, Edinburgh, Scotland, United Kingdom, 2-7 July 2017.
FAO. (2012). Food and Agriculture Organisation. Briefs on Import Surges - Countries No. 5 Ghana: rice, poultry and tomato paste.
FFI. (2016). http://ffinetwork.org/about/stay_informed/releases/images/Rice_Nigeria.pdf Accessed 20th February 2017
Foltz, J. D. (2004). Credit market access and profitability in Tunisian agriculture. Agricultural Economics, 30(3), 229-240.
GrowAfrica. (n.d). From smallholder to small business: private sector insights on service delivery models that boost profitability along the value chain. https://www.growafrica.com/resources/smallholder-small-business-private-sector-insights-service-delivery-boosting-profitability Accessed 20th February, 2017
Hazarika, G. & Alwang, J. (2003). Access to credit, plot size and cost inefficiency among smallholder tobacco cultivators in Malawi. Agricultural Economics, 29(1), 99-109.
IFC. (2012). Innovative Agricultural SME Finance Modelsâ€. International Finance Corporation. November, 2012. http://www.ifc.org/wps/wcm/connect/55301b804ebc5f379f86bf45b400a808/Innovative+Agricultural+SME+Finance+Models.pdf?MOD=AJPERES Accessed 15th January, 2017
Isa, J. O., Cyprian, C. A. & Sam, O. O. (2012). Resource use efficiency and rice production in Guma Local Government Area of Benue State: An application of stochastic frontier production function. International Review of Social Sciences and Humanities, 3(1), 108-116.
Johnson, M., Takeshima, H., Gyimah-Brempong, K. & Kuku-Shittu, O. (2013). Policy options for accelerated growth and competitiveness of the domestic rice economy in Nigeriaâ€. IFPRI policy note 35, IFPRI Washington, D.C.
Kohansal, M. R. & Mansoori, H. (2009). Factors affecting on loan repayment performance of farmers in Khorasan-Razavi Province of Iran. Paper presented at the conference on International Research on Food Security, Natural Resource Management and Rural Development, University of Hamburg, October 6-8, 2009.
Lançon, F., Erenstein, O., Akande, S. O., Titilola, S. O., Akpokodje, G. & Ogundele, O. O. (2003). Imported rice retailing and purchasing in Nigeria: A survey. West Africa Rice Development Association, Bouaké, Côte d’Ivoire.
Nmadu, J. N., Bako A. N. & Baba K. M. (2013). Micro-credit requirement, acquisition and repayment by vegetable farmers in Nigeria. IJTEMT, 2(6).
Nouman, M., Siddiqi, M. F., Asim, S. M. & Hussain, Z. (2013). Impact of socio-economic characteristics of farmers on access to agricultural credit. Sarhad Journal of Agriculture, 29(3), 469-476.
Ogunfowora, O. (2007). Financial analysis of parboiling and milling technologies in the Kura-Kano corridor. PropCom Monograph Series 18.
Oke, J. T. O., Adeyemo, R. & Agbonlahor, M. U. (2007). An empirical analysis of microcredit repayment in south-western Nigeriaâ€. Humanity and Social Science Journal, 2, 63-74.
Okello, J. J. (2012). Smallholder Agriculture: The Dilemma. Paper presented at FAO/UoNairobi Regional Workshop on Smallholder Commercialization held at Norfolk Hotel, Nairobi on June 6-7, 2012. http://www.fao.org/fileadmin/templates/esa/Workshop_reports/Smallholders_2012/Presentations_1/Okello_Smallholder_Dilemma.pdf Accessed 12th February, 2017
Okojie, C. A., Monye, E., Eghafona, E., Osaghae, G. & Ehiakhamen, J. O. (2010). Institutional Environment and Access to Microfinance by Self – employed Women in the rural areas of Edo State. NSSP brief No. 14. Washington, D. C: International Food Policy Research Institute.
Okorie, A. (1986). Major determinants of agricultural smallholder loan repayment in a developing economy: Empirical evidence from Ondo State, Nigeria. Agricultural Administration, 21(4), 223-234.
Oladeebo, O. E. (2008). Determinants of loan repayment among smallholder farmers in Ogbomosho Agricultural Zone of Oyo State, Nigeria. Nigeria Journal of Social Science, 17(1), 59-62.
Opeyemi1, G., Adedeji, S. O., Komolafe, S. E., Arotiba, K. & Ifabiyi, J. O. (2015). Analysis of consumers’ preference in patronizing locally produced and imported rice in Niger state, Nigeria. Nigerian Journal of Agriculture, Food and Environment, 11(3), 38-43.
Paglietti, L. & Sabrie, R. (2013). Linkages for inclusive agribusiness development. A report prepared under the FAO/World Bank Cooperative Programme, FAO Rome, 2013. http://www.fao.org/docrep/019/i3404e/i3404e.pdf Accessed 20th February 2017
Phillip, D., Nkonya, E., Pender, J. & Oni, O. A. (2009). Constraints to increasing agricultural productivity in Nigeria: A review. Nigeria Strategy Support Program (NSSP) Background Paper No. NSSP 006.
Reyes, A., Lensink, R., Kuyvenhoven, A. & Moll, H. (2012). Impact of Access to Credit on Farm Productivity of Fruit and Vegetable Growers in Chile. Paper presented at the International Association of Agricultural Economists (IAAE) Triennial Conference, Foz do Iguaçu, Brazil, 18-24 August 2012.
Tetteh, B. A., Sidney, N. A. & Stanislaus, A. A. (2011). Consumer preferences for rice quality characteristics and the effects on price in the Tamale Metropolis, Northern Region, Ghana. International Journal of Agricultural Science, 1(2), 67-74.
USDA. (2016). United States Department of Agriculture (USDA). Global Agricultural Information Network (GAIN) report. USDA Foreign Agricultural Services (FAS), April 2016.
https://gain.fas.usda.gov/Recent%20GAIN%20Publications/Grain%20and%20Feed%20Annual_Lagos_Nigeria_4-21-2016.pdf Accessed 28th February 2017.
Copyright (c) 2018 Uchenna Obih, Lloyd Baiyegunhi
This work is licensed under a Creative Commons Attribution 4.0 International License.
Author (s) should affirm that the material has not been published previously. It has not been submitted and it is not under consideration by any other journal. At the same time author (s) need to execute a publication permission agreement to assume the responsibility of the submitted content and any omissions and errors therein. After submission of a revised paper in the light of suggestions of the reviewers, editorial team edits and formats manuscripts to bring uniformity and standardization in published material.
This work will be licensed under Creative Commons Attribution 4.0 International (CC BY 4.0) and under condition of the license, users are free to read, copy, remix, transform, redistribute, download, print, search or link to the full texts of articles and even build upon their work as long as they credit the author for the original work. Moreover, as per journal policy author (s) hold and retain copyrights without any restrictions.