BusinessDay

Farmers yearn for mechanisation, cheap credit to drive agric growth in 2021

Farmers need mechanisation, irrigation, innovation, and a single-digit interest rate to drive growth in the sector in 2021.

According to them, the sector cannot change the fortunes of Nigeria’s economy with attendant exponential gains by way of earnings, employment, food provision, and other spin-offs if smallholder farmers still grow crops using crude implements and depend on rainfall agriculture.

They stated that for the country to attain a high level of food sufficiency and reduce dependency on food imports, it had to improve the level of agricultural mechanisation.

Nigeria is one of the least mechanised farming countries in the world, with the country’s tractor density estimated at 0.27hp/hectare, which is far below the Food and Agriculture Organisation (FAO) recommended tractor density of 1.5hp/hectare.

Nigeria is 132nd out of the 188 countries worldwide measured by FAO/United Nations in terms of the number of tractors in the country. This is one reason farming has been mainly subsistence, rather than commercial.

“Mechanisation is a very critical issue and it must be at the centre of the country’s food security plan,” said African Farmer Mogaji, CEO of X-ray Consulting.

“If farmers continue to use crude equipment, their poverty can never be eradicated. Farmers need to farm and harvest their produce using mechanisation to boost their productivity and profits, thus, impacting their livelihood,” Mogaji said who is also the head of agribusiness – Lagos Chamber of Commerce and Industry (LCCI).

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He noted that young people will only find agriculture attractive when it becomes fully mechanised and take it up as a profession.

Also, lack of access to adequate financing by farmers and other actors in the sector has remained a major impediment that prevents investments in basic farm inputs needed to raise productivity and sustain the growth of the non-oil sector.

As a result, yields have failed to increase significantly, leading to pervasive hunger and poverty.

Similarly, agro entrepreneurs seeking to build businesses that could boost food production has continued to remain at a subsistence level in the country.

“Funding is the biggest problem we have in Nigeria’s agriculture and we need it to put all the factors of production together to drive growth in the sector, especially in 2021,” said Abiodun Olorundenro, Manager, Aquashoot.

“The interest rate on agricultural loans from money deposit banks in the country is unsustainable and no agribusiness can survive with it,” he said.

Nigeria’s agricultural fundamentals are robust and include an estimated 84 million hectares of arable land out of which only 40 percent is cultivated and only 10 percent of the 40 percent is cultivated optimally.

But with adequate financing, the country can put its 84 million hectares of arable land to productive use, experts say.

Ibrahim Kabiru, national president, All Farmers Association of Nigeria (AFAN) said, “we must be innovative in our design, implementation, and execution of agricultural programs, projects, and activities in agriculture now.”

“How do we even track the progress we make? How much do we devote to research on this? These are issues that need to be factored in at the moment,” Kabiru said.

The experts also call on the government to create an environment that is conducive for farm machinery manufacturers, to establish assembly plants and also provide special funds to agricultural institutions to undertake research and development for local manufacture of agricultural machinery and implements.

In real terms, the sector grew by 1.39 percent (year-on-year) in q3 2020, but this represents a decrease of 0.89 from the corresponding period of 2019.

Agricultural contribution to GDP rose to 30 percent in q3 2020, despite the country’s economy entered its second recession in five years.