Omobolaji: Anchor Borrowers’ Programme was designed to satisfy political allies

CBN


• CBN Must Compel States To Refund Loans Collected For ABP
The President of the Farmers Empowerment Association, Abuja, Mr. Obaje Omobolaji, in this interview with JOKE FALAJU, spoke on the successes and failures of the Central Bank of Nigeria (CBN’s) Anchor Borrowers’ Programme (ABP), and how government can realise the laudable objectives of the scheme for the benefit of farmers.

It is two years since the Central Bank of Nigeria (CBN’s) Anchor Borrowers’ Programme (ABP) came into being, with one of its objectives being to reduce poverty among smallholder farmers. Would you say that this objective has been achieved?
I will say no. However, it has the potential of achieving this aim and objective.

Investigations have revealed some of those who obtained the loans diverted them to other ventures. Were there enough checks to verify the identity of the so-called farmers?
The ABP was designed to satisfy political allies rather than reduce poverty in the life of smallholder farmers. To that extent, it has served that purpose. With the creation of NIRSAL, who are fantastic competitors, I know all the CBN Development Finance Offices will be more proactive. As a matter of emphasis, CBN Anchor Borrowers’ Programme is just about to start practically during this dry season farming. What we had before now was ‘Associates Benefitting Programme.’ The checks are there on paper, but no follow-ups. The Project Monitoring and Reporting Offices are really trying on this.

Some state governments are contemplating legal actions against defaulting farmers in order to get them repay the loans they collected. Is the programme not laudable enough to sail with major turbulence?
Ordinarily, the CBN Anchor Borrowers’ Programme is one of the laudable programmes of the present administration that must be applauded. This programme like many others that are being test-run should not have been done on a very large scale. Like I said earlier, most of those states saw the programme as political compensation for voting the present administration into office, as non-farmers filled the list of beneficiaries. Civil servants and politicians smuggled in names of their subordinates and supporters; only few genuine farmers were involved.

So, are you in support of the mobile court approach being adopted by some state governments?
I support the mobile court move and total recovery of such funds by the states. This should not affect the future of the programme, but rather serve as baseline knowledge acquired for the benefit of better performance in the future. 

There are fears that about 4.8 million Nigerians may face critical food insecurity situations in 16 northern states and the Federal Capital Territory (FCT) in 2018. This much is given credence by a report jointly prepared by the Food and Agriculture Organisation (FAO), the World Food Programme (WFP), and the National Programme for Food Security. How will this take over of an otherwise laudable initiative like the ABP by politicians and civil servants worsen the scenario?
I am very happy with this report. You cannot keep the agricultural sector in the hands of the civil servants and politicians and expect anything better. The loans that you are talking about were politically dispensed in the few states that accessed such. Farming must be taken seriously by the implementers of the project for it to succeed. Many real farmers did not access the loans in the North, especially, North Central-FCT, Kwara, Kogi and Nassarawa. The farmers’ associations needed to be fully in the picture, with less involvement of civil servants in the implementation. It would be alright to restrict civil servants to monitoring. 

Remember, the farmer may be ordinary, but we have God that will stand by us. The report is a timely warning but can be averted if the needful is done. Change begins with me. Show it, don’t just say it.

Won’t this loan repayment debacle discourage government and others from future interventions in the agricultural sector?
Farmers’ disposition to the project is very positive and we are eager to participate in the programme. The clog in the wheel of success of the programme is not the farmer, but the CBN, civil servants, off-takers and the Participating Financial institutions (PFI).

CBN is the initiating institution saddled with the responsibility of birthing ABP, the monitoring role they played was very faulty. It takes too long a time before the CBN gives final approval for the disbursement of funds, meanwhile farming is time-bound. The CBN left the programme absolutely in the hands of the states. In other words, states were left with the funds all alone. 

Many civil servants in agriculture departments and ministries saw it as an opportunity to have their own share of the national cake. The need for alibi for their secret deeds compelled them to ensure that the programme failed, thereby putting the blame on the farmers, who have no one to defend them at before the CBN. 

On the part of the off-takers, the off-taking agreement was not properly spelt out at the outset of the project. Many farmers didn’t know what a hectare represents on ground, and there was no one to provide the practical knowledge on this. When you give a facility to a farmer to plant rice on a hectare of land, but he ends up planting on an acre, he will not be able to repay the loan because that is over-loan. The estimated output of the crop is not explained properly to the farmers, but at the end of the project you want the farmers to submit all their produce to the off-taker. It will definitely become a crisis. 

Take for example, if your expected output is five tons per hectare, it is only wise to tell the farmer to bring our tons to the off-taker, once it will cover the loan amount. Most commercial banks shy away from the programme and the Bank of Agriculture is analogue and cannot meet up with the required speed unless it is updated, up-scaled and upgraded.

With all you have said, do you then align with some farmers that are alleging that the conditions for repayment of the loan are quite stringent?
The conditions for the repayment of the loan are not stringent at all. The issue is that, when I am not involved in the preparation of the Memorandum of Understanding (MoU), tripartite agreement with the off-taker, how do I understand the repayment plan? The MoU or tripartite agreement is prepared by the CBN without the farmers, or their representatives; all you are expected to do is sign. So, the reason for the misunderstanding is the repayment plan. The ABP is a system hinged on an anchor (off-taker or buyer), who buys all produce from the farmers depending on its financial capacity. 

We have the banks used by the CBN to disburse funds to farmers (since the CBN does not give loans directly to farmers). After that we have the farmers, who plant the crops. So, the farmers supply the off-taker the agreed tons of produce at agreed price, which can be the prevailing market price, or agreed off-take price. The off-taker pays the bank the amount, and the bank deducts the CBN’s loan with nine per cent interest directly. The rest of the fund belongs to the farmers. Farmers pay back through produce, which we supply to the off-taker, and not direct cash. The need to guide against side selling cannot be overemphasised.

Are there other approaches that should be adopted to compel these farmers to repay their loans in order to sustain the programme?
When the foundation is faulty, what can the righteous do? The CBN should compel the states to pay or the money should be deducted from source because you cannot eat your cake and have it.

But why should some farmers see the loan as a reward for voting for President Muhammadu Buhari in 2015?
Farming is business. If you refuse to interact with established associations like Farmers Empowerment Association and others, this is what you see. The majority of the people that collected the loans are not into the business of farming hence not farmers but passersby. So, they have the right to look at the loan from that perspective. After all, the politicians used it to brag that they gave farmers money to farm. They never said they gave loans to farmers. Thank God for President Buhari, who has shown and demonstrated the political willingness to transform the agricultural sector to beat the oil sector. Real farmers are solidly for the President and they pay back their loans. They should go after the people they gave loans to because most farmers are yet to access the loans. The civil servants and state governments should not drag farmers into what they have caused. 

In this article:
Obaje Omobolaji
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