As of 2016, Nigeria’s food demand was 243,168,942 metric
tons and this is expected to grow to 335,100,918 metric tons in 14 years at the
pace of the population growth, which is currently estimated to stand between
206 and 208 million.
Over the years, different governments have come up with
several deliberate efforts and initiatives to stimulate growth of the
agriculturalsector and improve production, including initiatives such as
Operation Feed the Nation, Green Revolution, Lower River Basin Development
Authorities, National Agricultural and Land Development Authority (NALDA); and
the Directorate of Foods, Roads and Rural Infrastructure (DFFRI). While they
had some impact, these programmes have not been able to adequately address the
challenges or bring about sustained change in the sector, especially in the
case of food security.
It was evident that the private sector needed to also play a
significant role in the quest not only for food security in Nigeria, but
enhancing the contribution of the agricultural sector to the nation’s economy.
Amongst other things, key private sector players in Nigeria’s agric sector have
paid close attention to supporting smallholder farmers, in recognition of their
importance in the global agricultural value chain.
Smallholder farmers are farmers owning small-scaled plots of
land where they grow subsistence crops and one or two cash crops while relying
almost exclusively on family labor. These farmers play an essential role,
especially in sub-Saharan African countries like Nigeria where they represent
more than 80 percent of all farming activities in the country and provide up to
98 percent of the food supply for most crops.However, small plot sizes, limited
access to markets, inputs and finance make smallholder production unprofitable.
As a result, smallholder farmers are often caught in a cycle of producing
low-yielding, low-quality crops barely enough for domestic consumption.
Historically, agricultural companies in traditional cash
crop sectors such as cotton and maize, have developed smallholder outgrower
schemesto source raw materials. These outgrower schemes allow companies to
provide agricultural inputs (and sometimes, training) to farmers and then buy
the produce at the end of the season under some form of contractual
arrangement. More recently, however, outgrower schemes have been developed –
often with donor support – in a wider range of value chains including food
crops, livestock, and natural products.
Outgrower schemes are often designed to address numerous
sustainable agricultural objectives by bringing smallholder farmers into
mutually beneficial partnerships with large aggregators or processors and
increasing incomes by improving yields and produce quality through training,
access to credit and markets. Success, however, is often dependent on the
availability of partner or donor institutions to provide the needed financial
support.
To promote and initiate sustainable development in the
agricultural sector, financial services and solutions providers in Nigeria have
in recent times committed a lot of effort and facilitated innovative
infrastructure. Most notably, significant impact has been achieved through the
provision of credit facilities to outgrower initiatives targeted at helping
smallholder farmers to maximize their yields, while also contributing to the
nation’s development. Prominent among these financial services and solutions
providers is First City Monument Bank (FCMB).
FCMB (www.fcmb.com) has strategically intervened with
various initiatives and support to the agric sector. In the last few years, the
Bank has gone the extra mile to upscale the performance of agribusiness and in
the process turned around the fortunes of farmers. So far, FCMB has supported
over 100,000 farmers in Nigeria to boost food production and foster financial
inclusion through its various cutting-edge schemes andpartnerships with
individuals, groups, and other stakeholders in the agric sector.
Babban Gona-FCMB Collaboration
A case in point is the work FCMB has done with Babban Gona
(meaning “Great Farm” in Hausa language), an award-winning, high impact,
financially sustainable, and highly scalable social enterprise, partly owned by
the participating farmers. The scheme contributes to creating a secure future
for Nigeria’s youth by transforming agriculture into a job-creation engine that
helps to break the cycles of poverty and unemployment. Through the Babban Gona
Agricultural Franchise Model supported by FCMB, member farmers received
training, credit in the form of agricultural input and tillage services,
harvesting and marketing support that resulted in increased productivity and
profitability that is 2 to 2.5 times the national average. The programme which
started with just 100 farmers, currently has over 20,000 member farmers and
today signifies one of FCMB’s most significant commitment to the development of
the Agricultural sector.
FCMB’s Partnership with Psaltry International
Over the years, FCMB has worked extensively with Psaltry
International Company Limited (PICL), an indigenous agro-allied company
established in 2005 to market cassava produce. The company later expanded its
business line to include farm development and production of food-grade starch
from cassava. With support from FCMB and other stakeholders, Psaltry’s robust
outgrowers’ programme has grown to more than 2,000 farmers cultivating within
80 km radius from the factory in 4 different local governments in Oyo State.
With funding from FCMB, Psaltry’s Sorbitol Production Plant
with a capacity of 6,000MT per annum has been established and is awaiting
commissioning. Once the plant takes off fully, the company will be able to meet
60 per cent of the country’s annual sorbitol demand of about 10,000MT per
annum. FCMB also funded Psaltry farmers under the Anchor Borrowers scheme,
which benefitted 252 cassava farmers.
FCMB-Plantation Industries: A Partnership That Worked
Plantation Industries Limited (PIL) is a leading cocoa
processing company that engages in the processing and conversion of raw cocoa
beansinto cocoa liquor, cocoa butter, cocoa cake and cocoa powder. This GFSI
Markets Award recipient has a modern processing plant with the capacity to
process over 15,000 metric tonnes of raw cocoa beans per annum. The raw cocoa
beans are sourced from suppliers and also directly from cocoa farmers with
emphasis on quality control. Under the Anchor Borrowers Programme, FCMB
supported 1,424 outgrower farmers that rely on PIL for offtake.
Speaking on this unprecedented development and the
significance of FCMB’s support to various outgrower programmes, the Divisional
Head, Agribusiness of the Bank, Mr. Kudzai Gumunyu, said:
“Through our work with partners such as Babban Gona, Psaltry
and many others who have set up robust outgrower programmes, we are able to
provide smallholder farmers with tillage services, fertilizers, as well as
extension services. This helps to make their farm yields higher than those of
the average farmer, which means more income. As a result, these farmers are
able to send their kids to school, build houses, and many are coming on board
to join the scheme because of the great impact”.
A critical part of how FCMB helps improve the welfare of
smallholder farmers is by making banking and financial services accessible,
evenin some of the most remote locations in Nigeria. The Bank does this through
an agency banking model that allows farmers the flexibility and convenience to
carry out transactions, even within remote communities or areas far removed
from the locations of bank branches.
Through this model and several efforts, FCMB aligns with the
government’s financial inclusion drive to expand financial services access and
use to underserved populations. The lender has also formed partnerships with
some organisations including, World Savings Banks Institute (WSBI), German
International Development Cooperation (GIZ), Technoserve, DFID-LINKS, to
further the financial inclusion push.
Analysts and experts are of the opinion that with the giant
strides of FCMB in agribusiness, the Bank is well positioned to create
moreopportunities for farmers to add significant value to the quest of Nigeria
to attain food security and wealth for the nation.