The Federal Government has urged the Bank of Agriculture (BOA) to strengthen its lending operations and ensure that farmers across the country have access to affordable and timely financing to boost agricultural production and improve food security.
The government said access to adequate funding remains critical to unlocking Nigeria’s agricultural potential, particularly as farmers continue to face rising costs of inputs, equipment, transportation and other production expenses.
The call was made as part of renewed efforts to reposition the agricultural sector, increase domestic food production and reduce the country’s dependence on food imports.
The government noted that while Nigeria has vast arable land and a large population engaged in farming, limited access to affordable credit continues to constrain the expansion of agricultural activities, especially among smallholder farmers.
Focus on smallholder farmers
The Federal Government stressed the need for the BOA to prioritise smallholder farmers, who account for a significant proportion of agricultural production in the country.
It urged the bank to develop financing products that are accessible to farmers with limited collateral and irregular income, noting that conventional lending requirements often exclude rural farmers from formal financial services.
According to the government, farmers require financing at the right time, particularly at the beginning of planting seasons, when they need resources to purchase seeds, fertilisers, pesticides, machinery and other inputs.
Delayed access to credit, it said, could result in missed planting windows, lower yields and increased financial pressure on farmers.
Need for affordable credit
The government also emphasised the importance of keeping interest rates on agricultural loans affordable.
It said expensive credit could discourage farmers from borrowing and ultimately undermine efforts to increase food production.
The BOA was therefore encouraged to explore innovative financing models and strengthen partnerships with agricultural cooperatives, state governments, development institutions and private-sector stakeholders.
Such collaborations, the government noted, could help reduce lending risks while allowing more farmers to benefit from formal financing.
Boosting food security
The Federal Government linked improved agricultural financing to its broader efforts to achieve food security and stabilise food prices.
It maintained that increasing access to credit would enable farmers to expand production, adopt modern farming techniques and invest in improved inputs and equipment.
Greater financing, it added, could also support agro-processing and value-chain development, creating employment opportunities and increasing the income of farmers and other participants in the agricultural sector.
The government further urged the BOA to ensure that financing reaches genuine farmers and is accompanied by appropriate monitoring mechanisms to minimise loan diversion and improve repayment.
Expanding agricultural value chains
Beyond providing production loans, the government called for greater financing of the wider agricultural value chain.
It said farmers should have access to funding not only for planting and harvesting but also for storage, processing, transportation and marketing.
According to the government, strengthening these areas would help reduce post-harvest losses and enable farmers to earn better returns from their produce.
The BOA was also encouraged to support investments in mechanisation and technology, particularly those capable of improving productivity and reducing farmers’ dependence on manual labour.
Support for youth and women farmers
The government further highlighted the importance of supporting young people and women involved in agriculture.
It said targeted financing programmes could encourage more young Nigerians to view agriculture as a viable business rather than subsistence activity.
Similarly, improved access to credit for women farmers could help expand household incomes and strengthen their participation in the agricultural value chain.
The government said inclusive financing would be essential to ensuring that the benefits of agricultural development reach communities across the country.
Call for stronger accountability
While urging the BOA to expand lending, the government also stressed the importance of transparency and accountability in the management of agricultural financing programmes.
It called for effective monitoring of loans and proper evaluation of funded projects to ensure that public resources achieve their intended objectives.
The government expressed optimism that a stronger and more responsive agricultural financing system would contribute significantly to increasing food production, creating jobs and improving the livelihoods of millions of Nigerians.
As Nigeria continues to confront food-price pressures and rising agricultural production costs, the Federal Government’s renewed focus on affordable agricultural credit places the Bank of Agriculture at the centre of efforts to strengthen the country’s food system and build a more productive and resilient agricultural sector.