The Anchor Borrowers’ Program for farmers in Nigeria

The Anchor Borrowers' Program for farmers in Nigeria

The Problem Statement

The Anchor Borrowers’ Program (ABP) was established by the Central Bank of Nigeria (CBN) in line with its developmental function.

The Program which was launched by President Muhammadu Buhari on November 17, 2015, is intended to create a linkage between anchor companies involved in the processing and smallholder farmers (SHFs) of the required key agricultural commodities.

The Programme was borne out of the consultations with such relevant stakeholders as the Federal Ministry of Agriculture & Rural Development (FMARD), State Governors, agro-millers, and smallholder farmers.

The consultations were based on the need to boost agricultural production and non-oil exports in the face of dwindling crude oil prices and the negative effect on the revenue profile of Nigeria.

The program thrust of the ABP is the provision of farm inputs in kind and cash (for farm labour) to smallholder farmers to boost production, stabilize inputs supply to agro-processors and address the country’s negative balance of payments on food.

The Anchor Borrowers' Program
The Anchor Borrowers’ Program

At harvest, the SHF supplies his/her produce to the Agro-processor (Anchor) who pays the cash equivalent to the farmer’s account.

The programme is structured into three components, namely out-grower support, training and risk mitigation.

The Policy Solution

In 2017, CBN expanded the Anchor Borrowers’ Program (ABP) to include Agricultural Commodity Associations of the targeted Produce to expand the implementation of the ABP.

This decision was taken to further ramp up domestic production of identified commodities by leveraging the existing organized structures of the agricultural associations nationwide, thereby providing huge economics of scale in the implementation of APB.

In simple terms, NFG-CS will be leveraging her size and existing structures to help enrol registered members for the ABP.

The loan shall be targeted at smallholder farmers engaged in the production of identified commodities across the country.

The Farmers should be in groups/cooperative(s) of between 5 and 20 for ease of administration, but Nigeria suffers from policy instability driven by a high rate of turnover of programmes and personnel, which in turn has made the application of policy instruments unstable.

NIGAC Constructive Position/Take

Research and Results-based management system whereby all activities of an entity contribute to the achievement of desired results.

The approach hinges on defined accountability for results and requires systematic monitoring & self-assessment and reporting youthful population, most jobs created recent times are mostly from the informal sector.

This calls for more labour productivity than expansion in the informal sector to alleviation poverty, improve skill acquisition, focus on agriculture and international to increase productivity drive and sustenance and job creation for the achievement of stated National Employment Policy objectives.

The programme stakeholders are to work closely with financial institutions, including insurance companies, Nigeria Incentive-based Risk Sharing for Agricultural Lending (NIRSAL) and the CBN, to create the linkages and transparency required to sustainably enhance the production of the identified commodities.

Since the Anchor Borrowers’ Programme is relatively recent, its vision and mission highlight should be well channelled with the view of informing and influencing the expected beneficiaries.

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