Lagos — Sometime last year the Central Bank of Nigeria (CBN) in collaboration with the Federal Ministry of Agriculture and Water Resources (FMA&WR) came out with a N200 billion credit facility, which was to be disbursed to farmers under the Commercial Agriculture Credit Scheme (CACS).

The aim was to among other things: provide credit facilities to commercial agriculture enterprises at single digit interest rates; enhance national food security by increasing food supply and effectively lower the prices of agricultural produce and products, thereby promoting low food inflation; reduce cost of credit in agricultural production, enable farmers exploit the full potentials of the sector; and, increase output, generate employment, diversify the revenue base of the economy, increase foreign exchange earnings and provide input for the industrial sector on a sustainable basis.

Our stand then, which obviously has still not changed, was that considering the multifarious challenges of Nigeria's agricultural sector, this was not likely to be the required antidote, given that it targets a minute percentage of the system. And as if we knew what lay ahead, only a few months after, what we already have before us are allegations and counter allegations from stakeholders in the matter. Whereas the farmers allege that the money truly does not exist, since according to them, no one has yet assessed it, perhaps, owing to the stringent conditions attached; the banks on the other hand claim that the disbursement has since commenced. Whatever is the case, it does seem as if we have another case similar to the saga of the Textile Revival Fund on our hands. It is instructive to recall how government had not too long ago politicised the issue of reviving the country's ailing textile industry, first with a N70 billion facility and later with an additional N100 billion, and yet on ground nothing seem to be happening.

To say the least, we are not amused at all and we restate our earlier position that this strategy will never work given the attitude of Nigerians to such loans. It is either not going to be released at all as is presently been alleged or may never get to the real users. Neither were we surprised with what was published in one of the National Dailies last week (Nigerian Tribune) that the money was missing. What Nigerians are yearning for is an enabling environment that encourages business development. Such an environment would on its own support businesses to attract loans and also put them in a position to repay them. Frequent recourse to handouts, which is what we attribute the N200 billion loan facility to be, are bound to have an inflationary impact on the economy. As a matter of fact, the problems of Nigeria's agricultural sector are so many that a N200 billion loan facility will amount to just a drop in the ocean. It can never make any meaningful impact. How will this money improve the lives of the ordinary farmer in the village, who in spite of his difficulties still produces virtually all the food available in the urban centres? Will government not use it to buy more tractors to be parked at the government houses without any to work with in the fields? Is this largesse to settle political loyalists given the involvement of State Governments in it? Are we sharing a part of the national cake? We see this simply as a total misplacement of priority.

Consider also that the fund is targeted towards improving the fortunes of a few products including cotton, oil palm, rubber, sugar cane, rice, maize, cassava, wheat, dairy, poultry, piggery and fishery. So what happens to the rest? Are these the country's only areas of strength? We also find the choice of businesses to benefit from the fund equally surprising. We are told that to be eligible, the business must not be less than N300 million for an integrated farm with prospects of growing the assets to N500 million within the next three years; or N200 million for non-integrated farms/agro-enterprise having the prospect to grow the net asset to N350 million in the next three years. Except the few farms owned and managed by expatriates, how many indigenous firms engaged in this sector are at this level? Did our policy makers consider the fact that small holder farmers constitute not less than 80% of all farm holdings in the country?

Apart from tackling comprehensively the debilitating challenges of the economy, which has made it almost impossible for businesses to thrive in Nigeria; we think that agriculture being at least for now, the backbone of Nigeria's economy, requires a little more attention. It is indeed embarrassing that of Nigeria's 98.3 million ha of land, with up to 74 million ha being good for farming, perhaps only about 60 - 70% is presently utilized even as Nigeria is confronted with the challenge of hunger and poverty. Again, if truly the aim of the N200 million Agricultural loan is to attract farmers to engage in commercial agriculture as a buffer to the depreciating revenues from oil, then, its initiators must go back to the drawing board with a view to getting it to address the problems of the peasant farmers.