• Friday, June 14, 2024
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BusinessDay

States pull out of GES agric scheme over poor revenues

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Crop production in Nigeria is set to dip on account of the country’s 36 states pulling out of the Growth Enhancement Support (GES) Scheme.

In a statement made available to BusinessDay, the Ministry of Agriculture said that the states have pulled out of the GEs scheme, making it clear  that they have no money to contribute due to their low revenue levels.

Many of the states are grappling with economic downturn and depending on the Federal Government for survival.  The continued reliefs and bailouts given to states by the Federal Government point to their precarious financial situations.

Analysts say the implication of states pulling out of  the GES scheme is that crop  production for 2016 will be significantly reduced and the essence of the scheme defeated.

“It will lead to lower crop production and our food security will be under threat. This shows that our talk of diversification has been  lip service because the state governments ought to have prepared for it,” said Ahmed Rabiu-Kwa, executive secretary, Fertiliser Suppliers Association of Nigeria (FEPSAN)  in a telephone response to questions.

“It is still difficult for the Federal Government to pay it own part of the subsidy. The way forward is for the government to remove subsidy on farm inputs and ensure that farmers get good seeds and other  inputs,” he added.

The GES is a Federal Government initiative, aimed at transforming the agricultural sector. It involves cost sharing on major agricultural inputs, such as fertiliser and seeds between the federal and state governments and the farmers.

With the agreement, the federal and state governments are to pay 25 percent each, while farmers bear the cost of the remaining 50 percent.

The failure of states to save during the oil windfall and look inwards to tap into available resources has detered developmental projects, as many contractors are being owed huge sums.

In the Federal Accounts Allocation Committee (FAAC) for the month of May, federal, state and local governments shared the sum of N305.128 billion as revenue. The states, shared the sum of N57.229billion, representing 26.72 percent of the total allocation for May.

As at the fourth quarter of 2015, the debt owed by Nigerian state governments to deposit money banks (DMBs) was in excess of N600bn.

Muda Yusuf, director general, Lagos Chamber of Commerce and Industry (LCCI), said “It will have adverse effects on farmers. Agriculture is a sector that requires much of government support. This is going to be a major setback to our desire for food sufficiency, diversification and import reduction drive.

“The inability of states to pay is a reality that they don’t have the capacity to pay. Federal Government needs to give concession to the scheme by reducing the quota meant for the states,” Yusuf said.

According to Dokun Ogunbodede, managing director, Sedfort Farms, with the state government pulling out, farmers in the country are in for a very difficult time, which might be devastating to the country. “Most of our farmers are poor and it is only through subsidy on farm inputs majority get government support,” he said.

However, farmers under the scheme have continued to plead with the government for the continuity of subsidising farm inputs and correction of errors of the previous administration by making the GES better.

“The Buhari government should improve on the scheme by ensuring that these agro-allied contractors distribute good and quality seeds to farmers,” said Abiodun Olorundero, chief executive officer, Green Vine Farms, who is a farmer under the GES scheme.

Currently, the federal and state governments are yet to offset an accumulated N72 billion debt  agro allied companies that supply agro inputs to farmers under the GES scheme.

Josephine Okojie