The growth of small-scale agriculture in Nigeria is being held back by critical underfunding. To address this challenge, Agricultural and Rural Management Training Institute (ARMTI) organised a conference to improve practices in mobilising finance and forging partnerships for smallholder famers. DANIEL ESSIET writes.Less than one-quarter of the financing needs of smallholder farmers in developing countries, including Nigeria, are met, leaving an annual financing gap of more than $150 billion, a Technical Centre for Agricultural and Rural Cooperation ACP-EU (CTA) study has revealed.Total farmers financial needs is estimated at $200 billion.CTA is a joint international institution of the African, Caribbean and Pacific (ACP) Group of States and the European Union (EU).According to CTA, most of this unfulfilled demand for financing, which amounts to $84 billion, comes from 88 million smallholder farmers who regularly produce surpluses and sell them in the market.CTA also said that the bulk of the financing requirements come from local markets that trade in crops such as wheat, maize and cassava, stating that if the current trends persist, the financing gap will continue to stifle smallholder value chain development in the coming decades.Indeed, behind the funding gap is the reluctance of both public and private financiers to lend to smallholder farmers, based on a perception of unacceptably high risks.This has drawn the concern of Agricultural and Rural Management Training Institute (ARMTI), Ilorin, Kwara State, which believes that efficient use of public finance, which is currently the main source of bank lending to smallholders, offers significant opportunities for accelerating the growth of agricultural finance, especially as a means of leveraging private sector funding.To this end, the institute organised a conference to examine ways to leverage finance for agriculture, and particularly to unlock more funding to develop agribusiness in the smallholder sector.The event, which brought together key stakeholders from agriculture, finance, public and private sectors, sought ways to galvanise better funding of small-scale agriculture in the future.Speaking during the event, the Executive Director, ARMTI, Dr Olufemi Oladunnni, said: In Nigeria, agriculture remains the mainstay of the economy since it is the largest sector in terms of its share in employment. Unfortunately, the sectors performance has failed to fulfil its role in the economy due to a number of factors, chief of which is low agricultural financing for producers especially in the rural communities.With naturally endowed resources, such as ample fertile soils, warm climate and relatively regular rainfall, he noted that agriculture would by far, be the most successful sector in the economy, had it not been for poor access to funding.He said farmers lack access to finance to purchase new and efficient machinery that can lead to improved productivity and profitability.This is because a few existing credit facilities ask for collateral securities, which many farmers cant afford.In recognition of the importance of finance to agricultural development,Oladunni said the Federal Government has set up institutions to finance, provide insurance and de-risk agricultural lending to make it more attractive for participating financing institutions.He observed, however, that the failure to identify a common goal and mechanisms for adequate collaboration and better functional relationships among financial stakeholders in the sector has rendered the aggregate agricultural financing ineffective leading to productivity gaps despite modest achievements for agriculture.To address this, ARMTI, he disclosed, commissioned a study to explore factors influencing operational mechanisms of the financing institutions with a view to ensuring synergy to improve coordination to enhance agricultural financial service delivery to farmers.The overall objective of the study, he maintained, was to identify ways to improve the interaction and inter-functional relationships among various agricultural finance stakeholders, with the aim of developing an institutionalised coordinating mechanism.He said the study provided opportunity to assess stakeholders views and attitude towards collaboration; helped enhance interpersonal relationship among stakeholders; and facilitated efforts by policy makers to institutionalise collaboration in agricultural financing.He said the institute is ready to partner organisations to improve farmers access to finance and enable them to make their operations more profitable.
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