The Federal Government has taken a swipe at banks, saying that their refusal to lend to farmers was affecting the productivity of farming in the country.
It also said that within the last year an investment commitment of $7.8 billion investment from local and foreign investors had been obtained for the sector.
The Minister of Agriculture and Rural Development, Dr. Akinwumi Adesina, said these during his inaugural meeting with private sector partners in the agriculture value chain. The meeting, which held in Abuja, was convened to support the agricultural transformation agenda of the federal government.
The minister said the non-lending attitude of banks had made it imperative to restructure and recapitalise the Bank of Agriculture. This, he noted, would enable the bank channel more funds to the sector; hence increasing its contribution to the Gross Domestic Product.
Figures released by the National Bureau of Statistics recently said the real agricultural Gross Domestic Product growth rate in the third quarter of 2012 dropped to 3.89 per cent as against 5.76 per cent recorded in the corresponding period of 2011.
Adesina lamented that in recent times, some of the financing mechanisms, which were initiated by the federal government to boost lending to the agriculture sector, were frustrated by banks
He said: "Financing is a major challenge because banks have refused to lend to agriculture. The interest rate out there doesn't just make sense. We are tired of signing one agreement or the other with banks because their refusal to lend to farmers is disrupting the supply chain for the sector.
"Banks need to start lending to the real sector of the economy because when the chips were down, it was government funds that were still used to bail these banks.
"We are currently working with the President and the Federal Ministry of Finance to come up with a programme that would enable farmers have access to credit at a single digit interest rate
"As part of this, you will soon see a restructuring and recapitalisation of the Bank of Agriculture so that the bank can support our farmers."
Adesina said as part of boosting funding to the sector, the ministry would also look for other options in the capital market. He said until Nigeria begins to adequately fund farmers, it would be difficult for them to compete favourably with their foreign counterparts.
He however said the federal government would continue to come up with fiscal policies that would help promote the sector and make it commercially viable, adding that currently, the best performing stocks on the Nigerian Stock Exchange, are from the sector.