The Federal Executive Council on Wednesday approved N27 billion as 50 per cent subsidy for the supply of fertiliser to rural farmers in 2012.
The Minister of Agriculture, Dr. Akinwumi Adeshina, disclosed this after the Council meeting presided over by Vice President Namadi Sambo at the State House, Abuja.
Adesina, who, along with the Minister of Information, Mr Labaran Maku, briefed State House Correspondents, said government could not subsidise the agriculture sector, which accounted for about 70 per cent of the country’s work force.
The minister said the Federal Government would contribute N13.5 billion to the subsidy, while the state governments would account for the 50 per cent balance
``Agriculture in this country employs 70 per cent of the population, but you cannot tax the 70 per cent because they are mainly poor people.
``That is why the new programme involves subsidy. Subsidy is supposed to be for the poor not for the rich.
``What we are doing now with regards to that is that in this year, the Federal Government’s share of the growth enhancement support will be N13.5 billion for fertiliser.
``And the share of the states government is just a half of that. So, the whole thing for fertilisers will be roughly N27 billion.
``I believe we must continue to subsidise Nigerian farmers. The issue is not the subsidy, the issue is how do they get it.’’
Adeshina identified a faulty channel of fertiliser procurement and distribution, which he said, allowed only 11 per cent of the commodity to get to the real farmers.
He said to address the problem, FEC approved a nationwide implementation of Electronic Wallet as part of the Growth Enhancement Support system developed by the Ministry of Agriculture.
The system, according to the minister, will allow farmers to get allocation for seeds and fertilisers through mobile phones without the interference of a third party.
Adeshina explained that the programme was packaged in collaboration with banks, agro-based companies and the CBN to phase out middle men who have hitherto exploited the system.
He further explained that the new system would guarantee the delivery of fertilisers, seeds and other agriculture inputs directly to the rural farmers.
The minister maintained that the ministry has already floated a technology-enabled platform that would be used in the distribution and monitoring of the inputs to ensure they get to the farmers.
He said farmers would no longer need to carry cash to buy fertilisers as they would only need to make a call through the electronic system to place an order while payment would be made less 50 per cent subsidy through the bank.
He revealed that state governments have shown interest in the scheme, while the CBN has raised N30 billion in guaranteed loans for the commercial banks for the benefit of the farmers.
According to him, a pilot scheme has already been tested in 12 states with varying degrees of success of not less than 60 per cent depending on the mobile phone networks in the areas.
Adeshina said a back-up of paper vouchers would be used as supplement for the areas with inadequate telephone network for the system operations.