The Federal Government has approved N550 billion for the Bank of Agriculture (BoA) to support smallholder farmers and implement a Guaranteed Minimum Price (GMP) programme aimed at stabilising food prices in the country.
The bank’s Managing Director/CEO, Ayo Sotinrin, in a statement indicated that N250 billion of the fund would be used to finance smallholder farmers through technology-driven agricultural financing systems while the balance would be utilized to support the GMP programme.
According to him, the approved N550 billion will also enable the bank to buy farm produce during harvest and release it when necessary to help stabilise market prices and reduce food inflation in the country.
Sotinrin explained that the bank would channel financing of the programme through aggregation companies such as AFEX, ThriveAgric, and Arziki Noma, rather than lending directly to individual farmers to “improve efficiency, strengthen value chains, and reduce the risk of loan defaults.”
The banker advised farmers and agribusiness operators to continue to monitor further announcements from the bank and the participating aggregation companies for information on eligibility requirements and access to financing opportunities.
Analysts believe that the latest funding support by the government to the agricultural sector is a welcome development given its potential to create more opportunities for smallholder farmers, cooperatives, and agribusinesses nationwide.