Lagos State Federated FADAMA Community Association president, Alhaji Abiodun Oyenekan, has urged the Federal Government to evolve a new credit policy that will contribute to agricultural restructuring and boost food production.
Oyenekan asked that farmers access to finance be improved to enable them buy agricultural machinery to increase their productivity and incomes.
According to him, many smallholder farmers do not have access to modern agricultural machinery that can help increase their productivity and improve both food security and incomes.
This is because they can’t afford new tractors. Without access to credit, he said they often have no choice but to continue farming without the benefit of modern equipment. He noted, however, that credit for agriculture is still facing difficulties, such as high interest rates and strict loan approaches.
Right now, he explained that loans given by banks are not single digits and tend to be too expensive for rural smallholders to take advantage of financing, and they can rarely meet the rigid collateral requirements or pay back the loan within the typical short-term lending periods.
Oyenekan said credit for agriculture still faces difficulties, such as high interest rates and strict loan approaches. According to him, restructuring the credit policy will lead to banks developing loans for agriculture, which include production and processing of agricultural products and processing and consumption, production of seeds in crop, livestock, fisheries, forests and supplying of products and services and lending for trade development in rural areas.
Besides, he said there should be support for partnership and application of high technology in agricultural production; increasing competitiveness to contribute to sustainable development of the agricultural sector and enhancing the living conditions of rural residents and contributing to implementation of the national target programme of new rural areas.
He said there are funding windows provided for farmers by the Central Bank of Nigeria (CBN) and the World Bank to boost government’s efforts to expand agriculture sector while providing food security and improved nutrition to the rural poor.
For the agric sector to develop rapidly, he said the economy must support it’s demand for credit and expand business operation towards modernisation.