Access to finance by farmers, being a significant factor needed to boost agriculture productivity, is further being threatened by inability of farmers to repay collected loans, Experts say.
Speaking during the Businessday ‘African Business Convention’ on Wednesday, experts decried the attitude of farmers towards loans, stating that many of them see loans as ‘their part of the national cake’ which do not need to be repaid.
Dimieari Von Kemedi, CEO of Alluvial Agriculture noted that the psychological aspect of how farmers see financial intervention has posed a significant barrier to access to continuous funding.
We all have the responsibility to work hard on how farmers perceive loans and bring the farmers on the same page as the financiers, nobody will put their money somewhere that they fear the money will not come back, yet there are many challenges in repayment.
“It Farmers start with the assumption that they do not have to repay loans and along the line many of them start having challenges that you must work with them to address in order to improve their repayment capability.
“We all have the responsibility to work hard on how farmers perceive loans and bring the farmers on the same page as the financiers, nobody will put their money somewhere that they fear the money will not come back, there are many challenges in ensuring loan repayment,” he said.
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Kemedi, speaking further, noted that prompt repayment of loans enhances farmers’ access to finance, adding that working closely with farmers to understand their challenges, will help to address cases of low productivity as well as failure to repay loans. “That way our productivity will be enhanced because the funds accessed will be well utilized,” he added.
He also opined that having less citizens with the right knowledge, technique and mechanization will boost overall national productivity.
“One of the things that we need to do is to have less people in farming, but what we hear is that we should have more young people go into farming. Agriculture will produce more if you have less people doing it with technology,” he said.
Ade Adefeko, vice President, Corporate and Government Relations of Olam Nigeria, , stressed on the need to carry out financial intervention through Cooperatives, as that makes it easier for administration and repayment.
According to him, a lot of the smallholder farmers do not have an understanding of how loans work. “We need to rethink the empowerment programs that we have, there are many other aspects to it. If we want to be productive in agribusiness we need to support smallholder farmers and encourage them to organize themselves into cooperatives, dealing with cooperatives is easier than dealing with smallholder farmers.
“Many farmers receive the grants and think that it is their part of the national cake,” he said.
Adefeko stressed on the need for African countries to develop and trade business among themselves as they all have comparative advantage in agriculture which must be harnessed.
“Everybody is seeking a contract, no one wants to go into the agriculture business. We are major producers of the foodstuff we import and consume but our problem is in value addition. There is no point exporting raw materials, there is a need for us to add value before exporting.
“I am one of those who believe that the government has no business in business but to create an enabling environment,” he said.
He also decried poor infrastructure which, according to him, must be addressed to enhance agricultural productivity.
