The Central Bank of Nigeria, CBN, has scrambled a denial to a media report that the federal government sued many of the 70,000 rice farmers for failing to pay back N17 billion loan under the Anchor Borrowers’ Programme.
Isaac Okorafor, the bank’s spokesperson, told Premium Times on Thursday, February 6, 2020, that the report that 70,000 farmers in Kebbi have refused to pay back the ABP loans was “false and misleading.”
Okorafor was reacting to the report by Daily Trust where the chairman of the Kebbi State chapter of the Rice Farmer Association of Nigeria, RIFAN, Muhammed Augie, claimed that of the 70,000 farmers that benefited from the ABP loans in 2015, only about 200 farmers were able to repay their loans.
He recalled that before the launch of the programme in 2015, the state’s total rice production capacity was 70,000 metric tonnes per annum but by 2016 it has increased to 1.2 million metrics tonnes per annum.
“This testifies that real farmers benefited from the loan; otherwise the production level wouldn’t have gone that high,” Augie was quoted to have said.
“We find it very difficult to recover this loan. We had to resort to taking the farmers to court,” Augie reportedly told Daily Trust. “Now in every magistrate (court) you go, we have given the list of the farmers to recover the loan. The drive for loan recovery is now in the court none but 200 farmers could pay back out of the 70,000 registered in 2015.”
In November 2015, President Muhammadu Buhari launched the ABP to create a provide farm inputs in kind and cash to small-holder farmers, SHFs, to agricultural production and for the country to shrug off its negative balance on payments on food.
Farmers captured under this programme are those — although not limited to — cultivating cereals, cotton, roots and tubers, sugarcane, tree crops, legumes, tomato and livestock.
The loans are disbursed through any of Deposit Money Banks, DMBs, Development Finance Institutions, DFIs, and Microfinance Banks, MFBs, all of which the programme recognises as Participating Financial Institutions, PFIs.
According to the guideline of the programme, upon harvest, benefiting farmers are expected to repay their loans with harvested produce (which must cover the loan principal and interest) to an ‘anchor’ who pays the cash equivalent to the farmer’s account.
The anchor could either be a private large-scale integrated processor or a state government. In the case of Kebbi, the state government is the anchor.
Upon kickoff, the programme got its takeoff grant from the N220 billion Micro, Small and Medium Enterprises Development Fund, MSMEDF. Farmers get loans at 9 per cent interest rate. They are expected to repay based on the gestation period of their commodities.
Meanwhile, Okorafor said the CBN disbursed about N16 billion in money and inputs to Kebbi State — and not N17 billion “as media reports say”. Of this, about N2.6 billion is outstanding to be remitted, he said.
He told this newspaper that rather than filing a lawsuit against the defaulting farmers, the government “only extended the window for the farmers to repay their loans”.
“And we are happy to note that some of the farmers are paying back as we have recorded about 57,950 100kg bags of paddy already used as repayment,” he said, adding: “CBN has not sued the farmers. We disbursed the loans to the farmers through the Bank of Agriculture.”
He said right from the commencement of the programme, every farmer was aware of the amount of loan, the purpose and the repayment plan which they all endorsed with their associations.
On the contrary, while Okorafor dug in his heels, a top RIFAN coordinator in Kebbi State who does not want to be named because he was not authorised to speak, told this newspaper nobody wants to take responsibility for the farmers that defaulted.
He said it is true that those who defaulted have been sued “and many of them are scampering to pay up, since they thought it was free money that was given to them back then”. He however said not all 70,000 farmers were taken to court.
“Whosoever is telling you that the whole 70,000 farmers were taken to court is lying, because I know that some farmers who got the loan have finished payment since the year they got it,” he said.