Stakeholder Suggests New Ways For Farmers To Obtain Long Term Credit
The Chairman, Community of Agricultural Stakeholders of Nigeria, Emmanuel Ijewere, on Thursday suggested new ways for farmers in Nigeria’s growing agricultural sector to obtain long terms loans, including pension funds and Federal Government Bonds.
Mr Ijewere who spoke on Sunrise Daily, at the 2nd edition of the Ogun Investors’ Forum, holding in Abeokuta, the State capital, stressed that the best way to encourage famers and boost growth in the sector is to make long term loans available to farmers.
To this end, Ijewere highlighted the importance of the Forum, which is aimed at promoting agriculture and urban development. According to him , players in the agri-business industry and other stakeholders, including the banking institutions are able to dialogue and resolve issues.
“Historically, we thought agriculture meant farming but we’ve learnt a lot more now,” he said.
Logistics, communication, banking and ready market are some of the issues Ijewere raised concerning the value chain, which he said must be fixed and made to work in synergy for the benefit of all.
“It’s in totality, bringing everybody together on one table, discussing agro-business as one unit of event.”
On issues raised by members of the banking sector, concerning the lack of structure in the agriculture sector, which discourages bankers from granting farmers credit, Ijewere said “if they get their monies from short-term sources, they cannot give it on long-term basis.”
However, he explained that 75 per cent of the farmer’s cost is used in preparing the land.
Hence, “when you prepare the land for the first time, you use that same land for a minimum of about 5 or 6 years, but the sunk cost is already there in the first year. The banks would want their money back within 12 months, whereas you have spread it out over five or six years.
“So, you have this mismatch,” he said, noting that members of the banking sector have no training on the internal workings of the agricultural sector, as they do of the oil and gas sector.
“They have trained their people for those highfalutin worlds and highfalutin businesses. Nobody is going to talk about agriculture.”
Although the Federal Government and some State governments are making efforts to ameliorate this, “the long term solution is looking for long term funds”.
The Community Chairman went further to suggest that pension funds, which are built over a long period of time, be used as credit to farmers. Other suggestions he made were Federal Government Bonds, international funds.