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Funding models helping grain growers secure market

Funding models helping grain growers secure market
Grain growers now have better financing options they can explore in funding their cultivation activities without waiting on federal government interventions like the Anchor Borrowers Programme (ABP).
This is as collaboration has been deepening among platforms that are digitising agricultural operations and are connecting cultivators with investments.
At least 10,536 grain growers last year tapped into partnerships between AFEX, Thrive Agric, Farmcrowdy, Diageo and Dangote Rice Limited which focused on improving how cultivators of rice, sorghum, soybeans and maize access input funding. Effectively, they are also helped solve the off-taking challenge as markets with industrial consumers were secured without compromising gain for the farmers. The target is that by 2022, 1 million farmers would have been reached, $2.2 billion annual trade in volume, $600 million increase in income and 52,000 non-farming jobs.
AFEX/ Dangote Rice Limited on paddy rice
In this partnership for paddy rice supply, AFEX, a commodities exchange intensifying its local operation acted as the value chain manager, collateral and facility Agent. Dangote Rice Limited, a leading rice milling company in the food and beverage industry served as a financier and an off-taker. They provided AFEX with $3 million which were disbursed to farmers. The exchange monitored farm activities till harvest, coordinated and aggregated the repayment of loans by farmers and sealed the transactions by ensuring the transfer of the products back to Dangote Rice Silos for production. In that, 5,491 farmers in north western Nigeria benefited.
Diageo/AFEX on sorghum
Diageo plc, a British multinational alcoholic beverages company partnered AFEX to ensure that sorghum needed for its production was supplied. AFEX identified and registered 708 farmers, trained farmers on agronomic practices, coordinated the disbursement of input and monitored farm activities till harvest. It also helped farmers’ knowledge of post-harvest-handling. At the end, the loan repayment was settled with transactions with Diageo.
Thrive Agric/ AFEX on soybeans
Thrive Agric, a technology-driven agricultural company also partnered with AFEX which identified the identification and registration of farmers. The exchange served as a value chain manager to Thrive who financed the training and input that were provided to the farmers. It coordinated the disbursement of these inputs to farmers, monitored farm activities till harvest, coordinated and aggregated repayment of loans and finally settled transactions. The $205,000 financing affected 708 north west soybeans farmers.
Nigerian agric tech company pushing digital agriculture also appointed AFEX as a value-chain manager to coordinate the disbursement of $324,000 to 1527 farmers in inputs and loans to farmers.  Together, rural farmers were empowered through the provision with improved seeds, farm inputs on modern farming techniques and sales of their farm produce. Off-taking issues which could have occurred after harvest was contained as supply markets were already secured beforehand.
These are signs that financing models for agriculture are not only expanding but equally efficient for cultivators. It also means attracting youths to agriculture will progress faster, replacing the aging population of farmers
However on the path of investors Titi Odunfa Adeoye, Sankore Global Investments founder and chief executive officer, believes people can be part of the funding solution by actively investing in agriculture, in lieu of banking funds with zero interests.
“That money goes to farmers who get to access seeds and equipment,” she said said “There are ways you can build wealth for yourself providing access to these farmers and Nigeria will be richer because the people investing will be richer and then we can feed ourselves. I tend to think that access to finance is the bring problem that we have to crack for agriculture and would unlock everything else.”

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