Lagos – Stakeholders in the agribusiness industry have again expressed concern on the high-interest rates charged on loans to farmers by commercial banks.

According to the stakeholders, high-interest rate is affecting the growth of the sector.

Stakeholders who spoke with Daily Independent lamented that the interest rate charged on farmers by the banks is on the high side which no farmer can meet, saying that stringent conditions attached to such funds should be given desired attention.

The farmers thereby called for a restructuring of Nigerian banks to accommodate an agriculture desk to be supervised and headed by a professional in the agribusiness.

In addition, stakeholders advocated for the strengthening of the Bank of Agriculture (BOA) such it would be seen as a bank for farmers’ as a way to assist and boost productivity in the sector.

Audu Ogbeh, Minister of Agriculture and Rural Development, while speaking at an agribusiness summit in Lagos, last week, also lamented the lack of finance and the high-interest rate is a major factor limiting youths from venturing into agriculture.

He informed that the ministry is pushing for a reduction of agricultural interest rates to five percent, saying that Nigeria’s agriculture would get nowhere if interest rates are not lowered.

According to him, no farmer can survive the high-interest rates regime demanded by Nigerian banks, adding that while most banks rarely lend to farmers, the few who do charge high-interest rates have affected the growth of the sector.

Ogbeh, however, assured that he  will put in everything possible and work hard to address the development, stressing that it was time the nation fed its citizens and reduced importation of food to the barest minimum.

“You cannot borrow in this country to fund agriculture, yet they want us to do magic. Most of the banks insist that the lowest they can give is 25 per cent interest on their loans and no farmer can survive with that rate,” Ogbeh said.

Also, Anga Sotonye, an agribusiness strategist, in an interview with Daily Independent, called on the Federal Government to give priority to single-digit interest rate agricultural credit to farmers so as to boost food production and productivity.

He said, “Allow farmers to get credit at single-digit interest rate because this is one thing that President Buhari will do and he will be applauded, the ease in accessing money, you cannot farm without money, if you want to farm and you don’t have money it would remain a wish.

“You will not do anything; you won’t transform that wish into reality. So, for people to go back to the farm, for us to see more people go back to the farm, they need to have access to funding so that they can have the fund for the agricultural business,” he said.

Expressing optimism on the impact a single-digit interest rate regime would impact on the sector, Ogbeh said such will stimulate a whole lot of agricultural production.

“Priority should be given to agricultural credit and the priority is that the interest rate should drop below ten per cent, single digit to stimulate a whole lot of agricultural production that is what we need to do.

“We have to do that and that action have to start now, let the government do that, let the government do it because when people go to the farm they will be busy producing and there will be enough food for people to eat, so we need to get busy,”

Emmanuel Ijewere, the National Coordinator of the Nigerian Agribusiness Group (NABG), recalled that it was disastrous in the past because farmers have always viewed banks with absolute suspicion just as bankers have not shown enough respect to agribusiness people.

He added that but in recent time reality has dawned on bankers, banks and farmers on the need to partner.

“Then that relationship has changed they are now beginning to interact easily with each other, the banks themselves  are having stronger agriculture desks in their offices and therefore they are presenting people who understand the language of agribusiness and this is creating a better environment.

“Both the bankers and the agribusiness people have interest; they have stakes in Nigeria economic future. Both parties are beginning to work together. With the new momentum, the future is looking a lot brighter for all parties,” he said.

Femi Oke, Chairman of All Farmers Association of Nigeria (AFAN), Lagos state chapter said the government needs to strengthen the Bank of Agriculture (BOA).

He said the bank should be known as banks of the farmers where farmers could access loans that are not more than five percent with less cumbersome collateral conditions.

Wale Oyekoya, the Chief Executive Officer of Bama Foods, described Nigerian banks as the most unkind business people he has ever come across.

His words: “The banks we have in Nigeria are nothing but retailing outfits that are not opened for business opportunities. All they what is for you to come and open an account and when you return for the business support they will not do anything because they have nothing to offer”

He added that “Nigerian banks are not really helping the farmers because there is no way you can be giving loans to farmers at 26 to 28 percent interest rate. The profit margin of a farmer is plus or minus is 10 percent so if you give me a loan at 26 per cent definitely I am working for you”.

“As a banker, are you supposed to work for me or we are supposed to work for each other,” he queried.

Oyekoya, who is a former chairman Lagos Chambers of Commerce and Industry (LCCI), Agric and Agro Allied Group, further called for the restructuring of banks to have agriculture that is farmers friendly and not people that are merely interested in collect and help to bank money.

“The banks need to be restructured and have Agric desk and have some stakeholders in agribusiness sector to train them, they need fresh orientation when it comes to giving loans to farmers,” he said.


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