INCREASING RICE PRODUCTION IN NIGERIA THROUGH ANCHOR

BORROWERS' PROGRAMME (ABP)

POLICY BRIEF

he Central Bank of Nigeria (CBN), in Tpartnership with the Federal Ministry of Agriculture and Rural Development

(FMARD), launched the Anchor Borrowers' Programme (ABP) in Kebbi State in 2015 to c reate economic l inkages between smallholder farmers and reputable large-scale processors.

At the �me of the programme's incep�on, Nigeria was impor�ng¹ $6 million worth of rice daily.² Thus, the objec�ve of the programme is to increase agricultural outputs and significantly improve the capacity u�lisa�on of integrated mills.³

A�er its launch in Kebbi State, it was also unveiled in Adamawa, Kebbi, Kano, Ebonyi, Kas�na, Jigawa, Taraba, Anambra, Enugu and Benue States, to enhance rice produc�on capacity of the country to seven million tonnes of rice by the end of 2018.⁴

Through the ABP scheme, thousands of smallholder rice farmers are granted repayable loans with single digit interests of 9%⁵ to li� them out of poverty, create direct

and indirect job opportuni�es, and diversify the country's economy.

In the third quarter of 2016, there was euphoria over the success of the interven�on in Kebbi State. The government claimed that the ABP interven�on in the state has enhanced the harvest of one million tonnes of rice, which affirmed the commitment of the government to the exporta�on of rice by 2017.⁶

In response to this claim made by the government, Centre for Democracy and (CDD) collaborated with Premium Times Nigeria to undertake a fact-checking exercise with regard to the ABP. We focused on Kebbi State given that the programme was first implemented there and most of the success stories about it have been linked to government's engagement in that state. This policy brief presents a synopsis of key findings of the fact-checking exercise and iden�fies ABP's key successes and challenges that require urgent interven�on from government.

INTRODUCTION:

1 Rice importa�on in Nigeria has had nega�ve effects on the economy. It has raises domes�c infla�on, depletes foreign reserves, dislocates local produc�on, and exacerbates unemployment. 2 See Nigeria imports rice worth $6m daily – Ogbeh retrieved at h�p://punchng.com/nigeria-imports-rice-worth-6m-daily-ogbeh/ 3 See Pres. Buhari launches CBN Anchor Borrowers' Programme retrieved at h�ps://www.cbn.gov.ng/FeaturedAr�cles/2015/ar�cles/PresBuhariLaunchABP.asp 4 See Nigeria to produce seven million tonnes of rice by 2018 retrieved at h�p://punchng.com/nigeria-produce-seven-million-tonnes-rice-2018/ 5 CBN pledges 9% interest on Anchor Borrowers' Programme , accessed at h�p://nigeriannewsdirect.com/cbn-pledges-9-interest-on-anchor-borrowers-programme/ 6 See Nigeria's local rice produc�on target being met, export set for 2017 – CBN, retrieved at h�p://www.premium�mesng.com/business/business-news/216676-nigerias-local-rice-produc�on-target-met-export-set-2017-cbn.html

After its launch in Kebbi State, it was also unveiled in Adamawa, Kebbi, Kano, Ebonyi, Kastina, Jigawa, Taraba, Anambra, Enugu and Benue States, to enhance rice production capacity of the country to seven million tonnes of rice at the end of 2018.

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Enrolment in ABP in Kebbi State happens through two channels: 1) the public sector arrangement and 2) the private sector arm: Labana and Humza rice mills. These two enrolment arrangements have so far engaged, according to the government of Kebbi State, 78,000 beneficiaries⁷. The public channel enrolled 70,000 par�cipants and the remaining 8,000 were enrolled under the private sector. However, this contradicts figures released to our partner, Premium Times Nigeria, by CBN. According to the document released by CBN, there are 73,941 beneficiaries cul�va�ng 77,583 hectares of rice planta�on. This gives a difference of 4,059 fewer beneficiaries than the government claimed.

The CBN offered loans to farmers to cul�vate one hectare of land each through the Bank of Agriculture (BoA) and the banks working with Labana and Humza rice mills, for public and private sector arrangements respec�vely.

Kebbi State Ministry of Commerce played, and is s�ll playing, a significant role in ensuring that loans are not diverted to purposes other than rice farming. They do this through the verifica�on of land, recovery of loans, and grouping of the beneficiaries into coopera�ve associa�ons.

There is a significant field presence of the extension workers who provided the much needed training for farmers cul�va�ng the 77,583 hectares of land that have been allocated thus far for the programme.

Almost all sampled beneficiaries of the ABP a�ested to substan�al improvements in their livelihoods; as they became entrepreneurs, they created jobs for food vendors, vehicle mechanics, petrol sellers, truck drivers and transporters, to men�on a few sectors benefited.

Following the interven�on, rice millers and merchants admi�ed to taking advantage of the growing demand for rice in the state to economically empower themselves. Farmers also claimed to have expanded the market for distribu�on of their goods with customers including the state government, rice millers, rice merchants and final consumers.

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1. ABP IN KEBBI STATE: Our fact-checking exercise on ABP in

Kebbi State reveals the following:

KEBBI STATE

7 See SP C A P How Buhari's agric programme is crea�ng jobs, pushing Nigeria towards self-sufficiency in rice, accessed at h�p://www.premium�mesng.com/news/headlines/224697-special-report-%E2%80%8Ehow-buharis-agric-programme-is-crea�ng-jobs-pushing-nigeria-towards-self-sufficiency-in-rice.html

73,941 BENEFICIARIES

HECTARES OF RICE PLANTATION

77,583CULTIVATING

Contrary to the claim by CBN that NAIC provided an adequate insurance scheme to farmers who benefi�ed from ABP in Kebbi State, our fact-checking exercise reveals no evidence of NA C's role; even Kebbi officials did not men�on the insurance agency at all. Rather, farmers who experienced downturn or could not use the loans during last year's dry season have had their tenure extended in order to reinvest and be able to repay.

There are wide dispari�es in funding and inputs accessed by farmers registered under the public and private sector arrangements. The farmers registered under the private sector received cash and equipment worth N210,000 each, whereas those of the public sector received their deliverables totalling to irregular sums between N156,000 and N160,000 against the template of calcula�on provided by the government.

3. Disparity in access to funding:

There is poor coordina�on of Ministries, Departments and Agencies in the disbursement of alloca�ons to farmers. From our fact-checking exercise, the Kebbi State Commissioner confirmed the part payment of funds to some farmers with an indica�on that the balance was s�ll in the custody of CBN. By contrast, the CBN spokesperson denied the withholding of due funds with the asser�on that the apex financial ins�tu�on gave out the exact amount earmarked for each individual.

Funding and agricultural input for the programme was received a�er the dry season – the best period for plan�ng. This delay, as gathered, reduced the effec�veness of the programme in the state.

6. Delayed disbursement:

It was revealed that the procurement of seeds and pumping machines were not tailored to the cul�va�on needs of the rice farmers. Some farmers who considered these resources to be well at their disposal did not bother to take their seedlings, while most of the others who collected them could not u�lise them.

7. Dry Season:

The list for alloca�ons was alleged to have been infused with the names of friends, rela�ves and poli�cal cronies of Kebbi State officials; most of whom were not even interested in farming. This resulted in an inevitable protest by the rice farmers who felt short-changed.

8. Nepotism/Favouritism:

FINDINGS AND CHALLENGES:

Contrary to the government's claim that land verifica�on was applied in all cases, the CDD/Premium Times fact-checking exercise revealed that assistance was given to some farmers without verifica�on of any farmland. This posi�on was held by many farmers, especially those who benefi�ed from the private sector arrangement in the state.

2. The Nigerian Agricultural Insurance Corporation (NAIC):

Complaints exist that the payment for farmers registered under the public sector arrangement were staggered rather than disbursed as a single lump sum alloca�on. Payments were made to these farmers in two tranches of N49,000 and N 3 8 , 0 0 0 , a d i s b u rs e m e n t c o n s i d e re d unsa�sfactory to some farmers who harbour sen�ments of unfair treatment.

4. Disbursement methods:

5. Funding coordination challenges:

1. Verification of Farmland:

8 See Why We Created the ABP, retrieved at h�ps://www.cbn.gov.ng/FeaturedAr�cles/2017/ar�cles/ABP_Emefiele.asp

Essen�ally, the ABP interven�on is designed to address the perennial problems of low yield rice varie�es; poor farming prac�ces and lack of good quality farm inputs; non-u�liza�on of available cul�vable land manual system of produc�on; and inadequate funding for the development of nucleus farms and small farmers' out-grower schemes.⁸ While we acknowledge the impact the scheme has so far recorded in the state, several concerns highlighted have to be taken seriously if the gains made are to be sustained and improved upon.

We recommend that FMARD should ini�ate development of result-driven frameworks to address subsis�ng teething challenges in the scheme; in par�cular, proac�ve measures must be put in place to minimise wastage of resources. This will help bolster public confidence in the process as well as maximise the benefits of the programme for the people. This is par�cularly important for the ongoing efforts to scale up the programme in other states.

WHY ARE PROACTIVEMEASURES IMPORTANT?

WHAT FMARD SHOULD DO: As the key implemen�ng Ministry, FMARD should communicate the role(s) of par�cipa�ng MDAs more effec�vely to the farmers and millers in order to build confidence in the process. Be�er coordina�on of stakeholders is also needed to promote equitable disbursement of resources between those enrolled under the public and private sectors.

The process of registra�on should be more open and transparent; it would be especially useful to use public tracking measures, such as internet lis�ngs for people, to monitor the number and iden��es of those receiving alloca�ons under the ABP. Puni�ve measures should be taken against any official confirmed to manipulate the ABP process for selfish reasons.

The government needs to speed up infrastructural deficit of satellite services in local areas which delayed the process of ge�ng Bank Verifica�on Number (BVN) by some beneficiaries. To manage this, the registra�on of the farmers should commence much earlier so that farmers are duly registered and able to access needed funds before the end of the dry season of cul�va�on.

There is also need to review pa�erns of distribu�on of inputs through proper disaggrega�on of needs. Farmers' alloca�ons should be based on resources which are not easily accessible to them, while inputs could be redistributed using the exis�ng cost benchmarks for alloca�on to a more effec�ve end. This will enhance efficient u�liza�on of resources. Addi�onally, the alloca�ons should be made in a �mely and efficient manner to encourage par�cipa�ng farmers and millers for the success of the programme.

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several concerns highlighted have to be taken seriously if

the gains made are to be sustained and improved upon.

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Department for Interna�onal Development (DFID)

Open Society Ini�a�ve for West Africa

With Support from:

UK aidfrom the British people