Farmers have applauded the nine per cent interest rate credit policy of the Central Bank of Nigeria (CBN) to the agriculture sector but called for prompt monitoring of the Commercial Banks to guarantee effective implementation

Under the new policy, agricultural, manufacturing and the sectors considered as growth and employment stimulating, can borrow long term as much as N10 billion at consolidated nine per cent interest rate.

The CBN released the new new credit policy, called Guidelines for Accessing Real Sector Support Facility (RSSF) through Cash Reserve Ratio (CRR) and Corporate Bonds on Thursday.

National President Rice Farmers Association of Nigeria (RIFAN) Alhaji Aminu Goronyo said that rice farmers under the CBN Anchor Borrowers Programme (ABP) had being enjoying the nine per cent lending rate since 2015.

Goronyo expressed optimism that the policy would help improve production of other agriculture commodities in the sector.

He said the nine per cent lending rate under the ABP facilitated the increase in rice production from between two million and 3.5 million tonnes to nine million tonnes annually.

He advised farmers to key into the policy to enable them benefit from the intervention.

“Before the single digit interest rate by the CBN, our production annually was not more than between 2 million and 3.5 million tonnes per annum but today, we are producing almost nine million tonnes because of that intervention.

“I am sure it will be the same for other commodities that will enjoy this intervention,’’ Goronyo said.

In interviews conducted by the News Agency of Nigeria (NAN) National President, Women Agro Allied Farmers Association, Mrs Lizzy Igbine, said although the nine per cent lending rate would encourage farmers to increase production, there was need to reduce it to five per cent.

“We are asking for as low as five per cent, the CBN still has to do more.

“ It will go a long way to help us but we hope there won’t be any hidden rates or charges that farmers will pay after taking the loans,’’ she said.

President of National Cashew Association of Nigeria (NCAN) Mr Tola Faseru appealed to the CBN not to allow the policy to be a `lip service’.

Faseru, who said it was not the first time the CBN was directing commercial banks to lend to agriculture, noted that most banks had not complied with such directive.

According to him, most commercial banks viewed agriculture over the years as very risky. “I hope it won’t be lip service.

“I hope the commercial banks will comply with that because there was a time CBN told them that out of their profit, certain percentage should be channelled to agriculture and the manufacturing sector but they never kept to it.

“Before now, most of the commercial banks have been shying away from lending to agriculture, they like the quick return type of business.

“They see agriculture as very risky but that is where we have our comparative advantage as a country, so we need to develop the sector to be able to diversify the economy away from oil.

“This is a very laudable policy by CBN and we commend CBN for that but we plead with the CBN to put a mechanism in place to check compliance by commercial banks.

“I think CBN has been strong recently in their supervisory role of commercial banks.

“We trust that they will be able to follow through to ensure that the policy is implemented by the commercial banks; it will go along a way to help us grow the agriculture and indeed the export sector,’’ he explained.

National Publicity Secretary, National Fish Association of Nigeria Mr Chidike Ukoh said the expectation of farmers was for the CBN to still bring down the lending rates to about five per cent.

Ukoh said that lending rates on agricultural production were being subsidised as low as about two per cent in developed countries.

“When you have mass production of food, industries will have raw materials and the productivity level will bring aggregate income in the economy.

“The Gross Domestic Product (GDP) will be much in such volume of production. We are making a case for five per cent.

“If the commercial banks will comply with the single digit rate, it will be very nice. It is a development that we need to watch,’’ the publicity secretary said.

NAN recalls that guidelines followed the recommendation of the Monetary Policy Committee (MPC) of the CBN at its 119th meeting held between July 23 and July 24.

The MPC had emphasised the need to increase the flow of credit to the real sector of the economy, to consolidate economic recovery.

NAN reports that the new policy marks a big departure from the excruciating interest rate regime of 25 to 30 per cent that was blamed for stifling agriculture, manufacturing and other ventures in the country.