Nigeria: Banking on Agriculture in Kwara

Gov. Bukola Saraki
2 December 2009

The Nigerian state of Kwara has received international attention for its invitation to dispossessed white farmers in Zimbabwe to come to Nigeria. The oil-producing nation - Africa's most populous - currently imports about U.S.$3 billion worth of food to sustain its 140 million-plus people, and the Kwara government hopes the experienced commercial farmers will help the state become food self-sufficient. Over two dozen large-scale farms are now underway, providing employment for an estimated 3-4000 people.

What gets less attention is that Kwara's governor, Bukola Saraki, is focusing on agriculture and food security as a key component of economic prosperity. But his campaign is beginning to be noticed. He was a plenary speaker at the Corporate Council on Africa's annual meeting in September - this year in Washington, DC - and media attention to the state is increasing. Governor Saraki recently sat down in his office in Ilorin, the Kwara capital, where he discussed with AllAfrica's Reed Kramer and Tami Hultman his work to continue to expand credit facilities, to produce an agricultural surplus, to build schools and health centers and to transform farming into a prestige occupation for education young Nigerians. Here are excerpts from what he said about agriculture and food security.

In Kwara, our area of strength is agriculture, and we have a lot of schemes to encourage small scale farmers. The key issue is increasing yield. To take someone from subsistence farming to above that, he or she must increase yield. On one hectare of land, can he or she do three, four or five tonnes of maize as opposed to just two? That makes a difference between poverty and getting someone out of the poverty bracket.

What we've done is encourage them via mechanization and providing credit. And more importantly, I think the future holds a new generation of farmers - young graduates, qualified - who have moved to the cities and are roaming around looking for jobs in oil, banking, and engineering companies. Why? Because they don't see agriculture as a source of livelihood.

Now what we are trying to do is encourage them. We did that in collaboration with the scheme of [bringing in] new commercial farmers - which you have seen - which is this scheme where we had commercial farmers that used to be in Zimbabwe brought here, whose profiles do not meet the typical profile of the Nigerian farmer. A Nigerian farmer's profile is: 60 years old, not well educated, not well exposed to new technology, can't walk up to a bank and raise credit.

The new Nigerian farmer is much younger, is a graduate who can write a business plan, and that begins to make the young chaps think, "Oh, so there are these kind of farmers that exist all over the world; farming is not archaic or rural. That changes the orientation. We have a school now where we have a lot of young guys who now look at farming differently and say, "This could be a business!"

And we hope with that to get better productivity, because [this new generation of farmers] are just better equipped than the existing farmers. Also, with the commercial farmers, we hope that being beside the small-scale farmers, best practices will be transferred. You begin to see that already. If you look at small-scale farmers in Shonga [where the Zimbabweans first established their farms] and compare them to small-scale farmers in other parts of Nigeria, they are better - their yields are better. We believe that by having the commercial farmers, there will be a pull-up effect: as they are getting better, the small scale farmers will get better.

And there is what we call agro-allied industries. For example, if you look at dairy, the more dairy production you have, the more demand you will have for maize, soya beans, and all the feed stock. Who is going supply all the feed stock?

Some of the issues about small-scale farmers has to do with the lack of markets. They do grow these things, but who buys them?  If you have the agro-allied demand, you push demand on the small-scale farmers. If there is a market, it easier for the banks to go to the small scale farmers and finance them, because they know that whatever they produce, agro-allied industry is going to pick it up. That is not happening at the moment.

But when that happens, say you've a demand for 100,000 liters of milk on a daily basis, which means you need 2-4,000 cows, they need maize or soya beans for feed - who is going to supply that? So immediately the small-scale farmer can go to the bank and say, 'I need to supply farmer Y with so much maize every month, because he needs it for the cows.' And the bank can give him that money because they can see where he is going to get paid from. Right now, the farmer is saying, when I harvest, I will go to the side road and put it there and pray that someone is going to buy it. Or, if things are bad, I'm going to eat it myself; that doesn't really help the commercial side of it.

All of that needs to come together and that is what we are doing here. We believe, over time, those small-scale farmers will become more productive.

We have a lot of cooperatives and support from the micro-finance banks. But unfortunately, as I said, most of the commercial banks are very reluctant to lend to agriculture. That's also why we are doing a lot of land reform in order to provide security for the financial institutions. That doesn't exist at them moment; they don't have any assets to hold on to.

But the most important thing is creating the market. If we can create the market, the sector will stand on its own. At the moment the market is not there, so it is difficult for the financial institutions to give support.

The Zimbabwe farmers also had problems getting credit; you can imagine what it is like for the small-scale farmers. But luckily, since the Zimbabwe farmers have been here, they have been able to raise two billion naira [895,000 Euros] in credit. It is a bit frustrating for them, because they are the first, but I think as we continue to go through those processes, in a few years down the line, it is going to be much easier to access credit. That is one of the great things we have done with this project.

We have broken a lot of new ground that never existed before, because now agriculture is there and the government is doing something. The federal government has come up with a policy of providing 200 billion naira [895 million Euros] in five-year repayment plans. It never happened before - and it was based on the model that they saw here in Kwara state. Banks are taking equity in agricultural projects. These are things that never used to happen. So we are beginning to see this agricultural revolution and the country moving in that direction.

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