By JOHN ADETUNJI, Abuja
Managing director of the Nigeria Incentive-based Risk Sharing System For Agricultural Lending (NIRSAL), Aliyu Abdulhameed, yesterday disclosed that its Mapping-to-Markets (M2M) strategy which targets to fix the Maize and Soybean value chains in the country will save the nation N1billion.
Abdulhameed announced this yesterday at the end of the NIRSAL preliminary technical session/roundtable engagement with stakeholders for the M2M project in Abuja that the project is expected to save the country the said amount through import substitution. He said it will also possibly help each of the participating maize and soybean farmers generate up to N425, 000 and N2.26m respectively.
Also, three commercial banks including Stanbic IBTC, Union and Sterling banks have committed N4.5 billion to the M2M strategy. Stanbic committed N2bn while Sterling and Union Banks brought in N1.5bn and N1bn respectively.
According to Abdulhameed, NIRSAL will deploy its Credit Risk Guarantees on the financing tickets generated to provide comfort to financiers for loan disbursements. He said the commitments by the banks are for a pilot scheme to be run in Benue, Niger and Ekiti states.
He said NIRSAL will also deploy other robust risk management instruments including the Area Yield Index Insurance to safeguard yields at harvest, boots-on-ground Project Monitoring, Reporting and Remediation Office (PMRO) personnel in the 3 states and other risk management instruments to guarantee adequate returns on investment as and when due.
He said: ‘‘3,750 farmers will be supported across these three states. 107.5 Metric Tonnes of seeds worth approximately N65.5 million will be supplied by Seed companies. 2,062 Metric Tonnes of fertilizer worth about N290 million will be made available by the fertilizer companies. 33,250 liters of Crop Protection Products worth N54.6 million committed. 8,750 Metric Tonnes of maize with a market value of N744 million and 2000 metric tonnes of Soybean worth N208 million will be produced and off taken under this pilot phase.
‘‘Having achieved all these, and in line with the commitments from this workshop, NIRSAL will facilitate: the signing and implementation of long-term supply contracts/off-take trade agreements addressing pricing, quality, delivery and payment terms, etc. between farmers agro geo-cooperatives and the downstream market off takers; the signing and implementation of long-term supply and/or fee-for-service contracts between farmers agro geo-cooperatives and input suppliers, other upstream service providers for land clearing, irrigation, equipment leasing, tractorisation, mechanized harvest, etc. as well as other service providers along the value chain.’’
He also said that NIRSAL’s team will be in touch with all key stakeholders to ensure requirements are duly captured and interests fairly represented in the agreements and contracts for implementation.
‘‘One key issue this stakeholder meeting is bringing to the fore is the need for us to have a price hedging structure that will give comfort to all stakeholders. It is worth noting that NIRSAL is in discussion with relevant institutions such as Commodity Exchange institutions, National Collateral Registry and Insurance institutions on how to craft the best option. This will involve using physically secured produce in warehouses, innovative comprehensive index insurance products to hedge and stabilize any fluctuation that pose risk to stakeholders along the chain,’’ he said
The regional head, Agric Finance, Abuja and North Central, Sterling Bank, Oluwasegun Agrigbede said the bank has been in partnership with NIRSAL before now on different projects particularly through the Anchor Borrowers Programme but now they want to begin to lend to, particularly the small holder farmers directly from their balance sheet.
The registrar, National Collateral Registry, Mohammed Mainasara, said the Registry was in the arrangement to reduce the risks associated with banks’ lending. He said the Registry would also ensure that farmers are able to get access to credit secured with movable assets such as farmlands, and farm equipment among others.
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