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August 07, 2008

Nigeria's First ba,k partners Benue State to increase rice production

by John Akpodovhan 

The world is currently experiencing a food crisis, specifically in respect of rice production. Rice, being one of the most consumed grains in the country, had gone out of the reach of majority of Nigerians, since the price of bag of rice shot up from between N7,500 – 8,500 to N 12,000.

The development can be attributed to the global food crisis which informed the crucial meeting that President Umaru Musa Yar’Adua held with the 36 state governors of the federation. At the end of the deliberations, the President and the governors agreed to import 500,000 metric tonnes of the grain at N80billion into the country, a decision which attracted criticism from Nigerians, both within and outside the country.

Some critics did not see why the federal government should import rice worth N80 billion when such a huge amount of money , if properly channeled for the production of rice locally, could ensure the sufficiency of the commodity in the country. They argued that the grain could be produced in large quantities throughout the country and saw the venture as a waste of the country’s earnings. This group also blamed the federal and state governments for failing to encourage commercial farming. A former Head of state, Chief Ernest Shonekan, cautioned the federal government over the planned importation of rice because of the fear of global food scarcity.

In an interview with newsmen, the former Head of State said importation would not only make the nation that indulges in it dependent on other countries, it would also affect the economic potentialities of such a country. ‘I personally do not like the idea of importation of foodstuff because once you are importing foodstuff, you have made yourself a consumer and I think what we need to do is to grow our own economy through manufacturing, agriculture and all that. So they should move away from importation of food‘,'  he said.

However, coming on the heels of the hasty decision by the federal government to import rice worth N80billion in the country, in the face of the global food crisis, First Bank took the bull by the horns by releasing N500 million to 250 rice farmers to access as loan facility for rice farming in Benue State. The memorandum of understanding which was signed last month involved First Bank, Olam Nigeria Limited and the rice farmers. First Bank’s N500 million facility is one of the highest loan facilities in the country. This, it was learnt, was to be expended on the 10,000 hectares on which the grain was planted by the 250 farmers under the watchful eyes of Olam management.

The representative of First Bank at the occasion, Mr Victor J. Eraga,  said the MOU signed with Olam Nigeria was meant to finance the cultivation of about 10,000 hectares of rice in Benue State, adding that the bank was hoping to increase the facility and that the farmers should form cooperatives to enable them benefit from the loan. On the high interest rate, he explained that the interest is about 17 per cent.He noted that the beauty of the scheme, according to the Central Bank, was hinged on the provision that any of the farmers who completed his loan payment was entitled to a refund of 40 per cent of the interest, and further that the maximum loan that could be given was N250,000.

Mr. Eraga disclosed that the bank, with its partner, Olam, were working out a withdrawal scheme for the end users on how payment would be made within nine months to enable them to re-apply for another loan.

Markets/Business Service Director, Mr. Farouk Kurawa, described the MOU as a breakthrough for rice farmers in Benue State, saying that the essence of the arrangement was to improve their livelihood and increase rice production in the country by providing technical assistance and by helping them to access credit to expand their operations.

Markets, a USAID- funded programme, Farouk said, was already working on six commodities, including rice. The focus on rice was to encourage commercial production of the grain because of its profitability and great potentiality in the country. He pointed out that five million tons of rice are consumed annually in the country, out of which 3.5 million are imported, stressing that the country could not continue to depend on importation of rice. The Markets’ Business Service director posited that with good planning, Nigeria has the potentiality to produce all the rice it needs. He explained further that his organisation supplied high -yield improved varieties of faro 44 and faro 45 through Olam, its partner, to the farmers, which had increased their annual production of the commodity.



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