Farmers worry over Bank of Agriculture services, call for restructuring

Last week, the Federal Government inaugurated the Board of Directors for the Bank of Agriculture (BoA) to revamp agricultural financing and boost food security in the country.

BOA was established as the primary bank to support farmers by offering affordable loans to individual farmers, farmer cooperatives, agribusinesses, and small and medium-sized enterprises in the agricultural sector.

Members of the newly inaugurated Board include the chairman, Alhaji Muhammad Babangida; Mr Ayodeji Oludare Sotinrin, Managing Director and Chief Executive Officer; Hajiya Fatima Garba, Executive Director, Corporate Services; Mr Hakeem Oluwatosin Salami, Executive Director, Operations and Information Technology; and Hajiya Ka’amuna Ibrahim Khadi, Executive Director, Risk Management, as well as other non-executive directors.

Over the years, farmers have expressed concerns over the bank’s inability to help them meet their needs.

Despite several attempts to revamp the bank, farmers say the status quo remains, with access to finance shrinking since the collapse of the Anchor Borrowers’ programme, which was introduced by late President Muhammadu Buhari.

Last month, a coalition of Nigerian farmers’ groups, comprising smallholder farmers, commodity associations, cooperative societies, agro-processors, and agricultural stakeholders across the country, expressed dissatisfaction and ‘concern over the federal government’s decision to channel all agricultural intervention funds, grants, and programmes through the Bank of Agriculture (BOA).’

Moukhtar Muhammad, the special assistant to the national president of the Coalition of Farmers Associations of Nigeria (CAFAN), told Weekend Trust that their concern arose from the practical realities faced daily by millions of farmers who are the intended beneficiaries of these interventions.

He said a large number of farmers, especially those in rural communities, have limited access to Bank of Agriculture branches and services, adding that “delays in accessing funds, inputs, seeds, fertilisers, and other support services often result in farmers missing critical planting windows, thereby reducing productivity and affecting national food output.

“The Coalition is deeply concerned about the apparent operational and institutional limitations of the Bank of Agriculture in managing multiple large-scale agricultural intervention programmes simultaneously. Too often, critical funds are trapped in excessive administrative procedures or fail to reach actual practitioners. This has created frustration among farmers and diminished confidence in government agricultural support schemes,” he said.

Mr Felix Ekol, CEO, TYMDUAR Global Ltd, with large investment in cocoa, plantain and other tree crops, said that the bank’s current available credit facilities and other strategies create challenges for real farming.

“Amount vs. Cost: N50k – N250k in today’s economy barely covers land preparation, labour, and inputs for one acre. With inflation, N100,000 now has the purchasing power of what N10,000 had a few years ago,” he noted.

Ekol noted that there is also a problem with the repayment structure, adding that as a result, “farmers end up paying from other income sources, or taking new debt to service the old one.”

He also noted that the Group Liability Risk poses problems for farmers, noting that “in a group of 10, if 2 members default, the other 8 are blacklisted. This discourages honest farmers from joining.”

Voices from the states

Farmers in Kano hardly secure loans from the Bank of Agriculture to help them cultivate farm produce in commercial quantities, which they believe could stimulate economic growth and ensure food security, farmers’ associations told Weekend Trust.

Chairman of the National Association of Tomato Growers and Processors and Marketers of Nigeria (NATPAN) in Kano, Sani Danladi Yakadawari, said members of his association have never secured any loan from the bank despite meeting all the criteria set for them.

The NATPAN chairman recalled that in 2019, the association requested the sum of ₦6.7 billion as a loan from the BOA but withdrew its application because of many issues.

“We haven’t benefited from any loan from the Bank of Agriculture despite several applications for it to support our production.

Similarly, Secretary of the Kano state chapter of All Farmers Association of Nigeria AFAN, Alhaji Garba Bichi, said despite having an account with the bank, he has not personally secured loans nor have other farmers who are AFAN members.

In Katsina State, many farmers told the Weekend Trust that obtaining loans is often a difficult process.

According to Malam Harisu Magaji, the BOA has three branches in Katsina State, covering all 34 local government areas. The branches are located in Katsina, Funtua and Daura. He, however, added that because a large number of farmers reside in rural communities, accessing the bank’s services remains a challenge for many genuine farmers.

He notes that, although beneficiaries acknowledge that BOA financing has helped them purchase improved seeds, fertiliser, agrochemicals and other farm inputs that would otherwise be beyond their reach, only a few farmers in Katsina State can testify to benefiting from the scheme.

Similarly, another Katsina-based farmer, Usman Bello of Danmusa, said one of the biggest concerns is the delay in loan approval and disbursement, adding that by the time funds are eventually released, the ideal planting window has often passed, forcing farmers either to borrow from informal lenders at higher costs or scale down their farming activities rather than wait for bank loans.

Similarly, farmers in Benue State have expressed dissatisfaction with the operations of the Bank of Agriculture (BOA), saying the bank has failed to provide the timely financial support needed to boost agricultural production.

Some farmers, who spoke on the Federal Government’s policy making BOA accounts mandatory for beneficiaries of agricultural intervention programmes, argued that while they are aware of the policy, the bank’s poor accessibility and slow processes have continued to frustrate them.

Chairman of the All Farmers Association of Nigeria (AFAN) in Benue State, Pastor Ernest Atoji, however, said Nigeria’s agricultural financing system does not align with the realities of the farming calendar.

He said that many farming communities are located far from BOA branches, making it difficult for farmers to open and operate accounts.

He also lamented the bank’s limited digital services, saying most farmers still depend on commercial banks and fintech platforms such as OPay and Moniepoint to carry out financial transactions.

In Edo State, there are mixed reactions as some farmers claim they haven’t benefited from the Bank of Agriculture while others say they have.

The Edo State Chairman of the All Farmers Association, Joel Usaigbu, said that though he has an account with the bank, he had not sought a loan or support from the bank.

According to him, a few members have applied for it, but not all of them were given the loan.

“The last time I met with the bank’s manager, he told me that the loan beneficiaries had defaulted and they can’t give to others who are seeking a loan with the bank.”

He said they are working with the farmers to work out the loan repayment plan so that they can offset the loan for others to benefit too.

Also speaking, Donatus Imaghodon said he has benefited from the bank’s support and various interventions of the Bank to improve his farming business.

“To the best of my knowledge, BOA has been supporting farmers. Cassava Growers Association has benefited from the bank in the past.  But, the problem is that some farmers, after getting the loan, failed to pay back. They believe that any loan or grant from the government is free,” he said.

Donatus, who is the Edo State Chairman of the Cassava Growers Association, said the recent one he was involved with members of his association, he had to use the police to recover the loan from defaulted members.

Commercial farmers in Cross River State say the BOA failed to provide meaningful support to farmers despite its mandate to promote agricultural development.

The immediate past Chairman of the All Farmers Association of Nigeria (AFAN) in Cross River State, Chief Ilem Nathaniel, and a commercial fish farmer, Capt. Agba Ukel (retd.) said accessing credit and other support from the bank has remained a frustrating experience.

Nathaniel alleged that only a negligible number of farmers, if any, had benefited from the bank’s programmes, noting that the institution subjected applicants to cumbersome procedures without tangible results.

He maintained that the Bank of Agriculture had become inaccessible to genuine farmers, insisting that the institution was no longer serving the purpose for which it was established.

Bank recapitalisation question

Last year, President Bola Tinubu approved N1.5 trillion in recapitalisations for the BoA, with an additional N200 billion committed to direct agricultural interventions.

The Minister of Agriculture and Food Security, Sen Abubakar Kyari, told journalists during the inauguration of the BoA board last week that the approved recapitalisation of the bank was the boldest ‘commitment to agricultural finance in Nigeria’s history.’

He said that the restructuring process was currently being supervised by the Bureau of Public Enterprises with the Ministry of Finance Incorporated and the Central Bank of Nigeria serving as shareholders.

According to him, ‘’the bank has commenced a comprehensive digital transformation covering loan appraisal, disbursement and recovery to ensure faster, more transparent and efficient access to credit for farmers.’’

Stakeholders recommendations

Dr Austine Maduka told the Weekend Trust that “the governance structure of the Bank should be reviewed to ensure that farmers, agricultural cooperatives, commodity associations, agro-processors, and other stakeholders within the agricultural value chain have meaningful representation and participation. This inclusive ownership and governance model reflects the structure of several successful agricultural finance institutions across the world, where producers have a direct stake in the institutions that finance agricultural production.

“A reformed and adequately capitalised Bank of Agriculture would significantly improve access to affordable credit, enhance agricultural productivity, strengthen food security, empower cottage industries and agro-processing enterprises, create employment opportunities, and stimulate rural economic development.”

We’ll improve capacity, efficiency – BoA

The Chairman of the board, Alhaji Muhammad Babangida, said after the inauguration that he will work with management and stakeholders to improve capacity, efficiency and impact.

“Our success will be measured not only by financial performance, but by real impact in empowering farmers, supporting agribusinesses and improving livelihoods,’ he said.

The Managing Director and Chief Executive Officer of the Bank of Agriculture (BOA), Mr Ayodeji Oludare Sotinrin, said that his “vision for the Bank of Agriculture is to deploy capital in an intelligent, smart, and highly efficient way to reposition the institution as a catalyst for food security and rural prosperity. We are bringing everyone into the financial net, especially the youthful population of farmers in our hinterlands, to create a new, resilient food system for Nigeria.”

Contributions from: Vincent A. Yusuf (Abuja), Ahmad Datti (Kano), Musa Giginyu (Katsina), Hope Abah (Makurdi), Usman A. Bello (Benin) & Eyo Charles (Calabar)

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