IF the Commercial Agriculture Credit Scheme (CACS) recently initiated by the Federal Government and approved by the National Economic Council is to succeed, government must move quickly to debunk wide notions emerging from the scheme. First is the cynicism about the efficacy of the policy for upscale operators in the agro sector and the efficacy of the fund. It is being fast tracked, the cynics snort, because it is the elite and the privileged who are rubbing themselves at their backs. Much as this view is potentially possible, it does not have to be true.Secondly, the frenzied advertising of the N200 billion fund for agricultural projects so far depicts our national peculiarities at throwing money at a problem and negligently impedes the dissemination of the important details of the initiative. This is a recurring reason why the country often obtains suboptimal results from what was adjudged a sound policy and ultimately makes less than the desired impact on the national economy.The Council resolved to provide the N200 billion for on lending for 'large scale commercial agriculture'. The Central Bank of Nigeria (CBN) has subsequently provided guidelines on the disbursement method and already, an overwhelming number of applications have been filed for a sum in excess of N300 billion which is above the current total of the scheme.It appears that from conception to the invitation for applications, the CBN and the Government have been quick off the marks. The creation of the CACS is, in part, a recommendation of government and non-government committees' advisories on the requisite responses to evident distress situations in the Nigerian macro economy: the blast of a global meltdown, the contraction profile in Nigerian public finance and a long standing alarm on a burgeoning current food crisis.The agriculture credit package of N200 billion exclusively dedicated for the intervention in the agro sector, except for the N40billion reserved for state governments, bears all the hallmarks of medium term commercial lending programme ' five years maximum tenor ' with the additionally unique feature of a single digit fixed interest rate. The CBN also underwrites to the Banks or Treasury this unstated subsidy differential bound to arise in the Nigerian market.This scheme, said to be different from, and not to be regarded as another of the CBN generational efforts in agriculture finance, is to be administered in direct partnership with the Federal Ministry of Agriculture and Water Resources, as the proxy of the Federal Government. The funds for lending are to pool from proceeds of a bond market fund raising by the Debt Management Office and to be on-lent at an absolute maximum of nine per cent through two Nigerian banks to farms and agricultural enterprises.In the current CACS, the policies and guidelines that govern access to the fund are hardly known even among the target segment of 'large' companies (must be worth over N300 million in assets excluding the land) and 'non-integrated farm or agro-allied farmers (N200 million) until they meet either of the two designated banks. For the access by State Governments and the Federal Capital Territory, the governors are to pick and choose the beneficiaries of selected access to cheap funding.It is axiomatic that the National budget made no proposals for an agricultural sector fund nor was it articulated that dedicated allocation of credit to critical growth areas will be pursued. Yet, without much of a discussion, commercial banks incorrectly began to advertise to Nigerians that it had custody of funds from the Federal Treasury for agricultural sector borrowers. It is a misguided enthusiasm that may negatively affect or politicise the scheme.Taking into account the many hues and cries for Government's intervention to inflate the economy, we ought to be clearer that the Commercial Agriculture Credit Scheme is not one of the quick- fix suggestions in that direction. Nigerian political and business leaders should not misunderstand CACS as a midway between populism and political party patronage. There should be no claims that the CACS is another flag post of the Seven-point agenda, for that will be dragging the scheme into a dubious political arena.It is a paradox that the place of agriculture finance in the country's political economy of Nigeria is so variegated and tends to be much abused in times of real emergency and under the direction of political champions. Consider the very limited achievement of the Green Revolution and its predecessor, Operation Feed the Nation. We can reflect that, the one programme under the civilian authorities was not as successful as the initial efforts of the then military regime; it is held generally that the then Green revolution was unable to sustain the agricultural prices index in the years soon after the military left and civilians held power for five years.But times have changed drastically. Nigeria caters for the agricultural produce that serve West Africa and the Sahel region and her own population growth rate has been excessive with little success in making the important socio-economic corollary milestones to mitigate the crisis. The CACS is a commercial venture in agriculture, and all the inherent attendant risks ' epidemics are not wished away.The scheme needs to be with no default rates as well as with bountiful harvest for private company and state government borrowers. It remains however, to be seen what intervention would be made in the peasant and subsistence farming sector where millions of Nigerians live out their work hours. The annual fertiliser gimmickry by public servants has proved inappropriate.All stakeholders and the monitoring authorities must ensure a higher success rate than we have had in the deployment of public funds in Agro-allied sector. The prognosis of the next few years for Nigeria hinges on physical security and food security.
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