Anchor Borrowers Scheme: Farmers lament losses from CBN loan scheme and flood disaster

By Hauwa Ali, Daniel Adaji

A group of farmers in Lagos State have expressed their dissatisfaction and frustration with the Central Bank of Nigeria (CBN) anchor borrowers loan scheme, which they said has left them in debt and despair.

The farmers, who are members of a cooperative society, said they applied for the loan scheme in 2021, hoping to boost their rice production and income. The scheme, which was launched by former President Muhammadu Buhari in 2015, is meant to provide loans and inputs to smallholder farmers who produce and process key agricultural commodities.

However, the farmers who do not want to be mentioned, said they did not receive the inputs on time and when they planted, their crops were destroyed by flood. They also said they did not get any insurance cover for their losses and they are now unable to repay the loan.

“We benefited from the CBN anchor borrowers loan scheme, but it was not a good experience for us. We received inputs worth #1,000,000 for the whole cooperative, but they came in very late. We planted late and then the flood came and wiped out our farms. We lost almost ten hectares of our rice farm,” said the chairman of the farmers cooperative who preferred anonymity.

He said they contacted the insurance company that was supposed to cover their risks, but they were told that they were late and therefore, the insurance could not cover them.

“We are now in a dilemma. We have no crops to sell and we have no money to pay back the loan. We are appealing to CBN and the government to help us out of this situation. We are not defaulters, we are victims of circumstances beyond our control,” he added.

The farmers’ plight is not an isolated case. According to the National President of All Farmers Association of Nigeria (AFAN), Arc Kabir Ibrahim, many farmers across the country who participated in the CBN anchor borrowers loan scheme have faced similar challenges.

He said AFAN, which is the main organization that represents all farmers associations, was not consulted or directly involved in the program.

He said the CBN dealt with the selected commodity associations and other beneficiaries directly, without involving AFAN as a body.

He also said that there was a major flaw in the implementation of the program that led to the poor repayment rate and some negative impacts on the whole National food system.

He said that many farmers did not receive the inputs on time or at all, and some of them received substandard or expired inputs.

He also said that many farmers did not get adequate extension services or market linkages for their produce.

He said that AFAN did not owe anything to the CBN or any financial institution, as it did not participate in the CBN anchor borrowers loan scheme.

“The loan was illegal that’s why we did not take part. That’s not how Anchor Borrowers are done in the US and other places. All the people who took part in it should be removed from the office.”

He said that the CBN governor foolishly orchestrated the Scheme to impress the Buhari government that was focused on improving Agriculture and food security, but made worse, the food crisis situation in the country.

“The CBN figured out that they could reach the rice farmers directly and won’t need anyone else. But the farmers didn’t tell them of the association, AFAN. If they had gone through the Association, we would not just distribute the inputs or money, we would have asked questions and ensured the right people are the beneficiaries of the loan.

“Now the people they gave the loans, did not give the money or inputs to growers, instead, they went to the market to buy from farmers to impress and made the commodites scarce which drove the prices up. If the scheme had succeeded, people would not be buying rice at the costly price they are buying now.” the AFAN president said.

He however acknowledged that the severe flooding of 2022 affected many farm-lands in Jigawa, Kebbi, Bayelsa and some other states and both groups of farmers who participated in the CBN APB and those who did not suffered losses and in some cases, their entire investments were sadly lost.

He said that AFAN had no idea about the value of the input/loan per beneficiary or whether the loan came with insurance.

He called on the CBN and the government to review and restructure the program to make it more inclusive, transparent, accountable and responsive to the needs and challenges of smallholder farmers.

He also urged them to provide relief and support to the affected farmers who are facing difficulties in repaying their loans or recovering from their losses.

He said that AFAN was committed to working with all stakeholders to ensure food security, economic diversification, job creation and poverty reduction in Nigeria.

The CBN Anchor Borrower Program is a scheme initiated by the Central Bank of Nigeria (CBN) to support smallholder farmers and promote agricultural production in the country.

The program was launched by former President Muhammadu Buhari on November 17, 2015.

The aim of the program was to create economic linkages between smallholder farmers and reputable companies (anchors) involved in the production and processing of key agricultural commodities.

The program provided loans to farmers through participating financial institutions (PFIs) at a single-digit interest rate, as well as inputs, insurance, extension services, and guaranteed markets for their produce.

The program covered various crops such as rice, maize, cassava, cotton, wheat, tomato, poultry, fish, sorghum, oil palm, cocoa, livestock, etc.

The program has benefited about 3.8 million farmers since its inception.The program is expected to enhance food security, diversify the economy, create jobs, and reduce poverty in Nigeria.