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AN INVESTIGATION ON THE INFLUENCE OF THE ANCHOR BORROWER PROGRAM ON AGRICULTURAL COMMODITIES IN BIRNIN KEBBI, KEBBI STATE
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Delivery: Within 24 hoursAN INVESTIGATION ON THE INFLUENCE OF THE ANCHOR BORROWER PROGRAM ON AGRICULTURAL COMMODITIES IN BIRNIN KEBBI, KEBBI STATE
CHAPTER ONE
INTRODUCTION
1.1 Background of the study
The wide range of opportunities in the agricultural industry attracts increased attention from stakeholders and governments worldwide. The Nigerian government has recognized that reduced consumption of domestically grown crops could have negative consequences for the Nigerian economy. These consequences include a decrease in revenue, a rise in unemployment, inflation, a decline in foreign reserves, an increase in inventory, the presence of low-quality crops in the market, price discrimination, issues related to rural-urban migration, and low productivity, among other factors (Ade, 2018).
Prior now the Nigerian government has implemented an embargo on the importation of certain agricultural items, such as foreign rice, dairy products, and tomatoes, among other commodities, over land borders. This measure aims to regulate and restrict the entry of these goods into the country (CBN, 2017). In a situation where there is a scarcity of food, there may be a surplus of demand, leading to a rise in pricing as consumers compete with each other, resulting in higher domestic costs. This might potentially result in a surge in the cost of food products, disproportionately affecting the impoverished population who allocate a significant portion of their income towards essential food items. This is particularly evident in Nigeria, where more than half of household expenses are dedicated to food. Any rise in food prices significantly diminishes both the availability of food and the capacity to buy other essential items (Saheed, 2019). The fluctuation in domestic food costs leads to economic uncertainty and can potentially lead to reduced investment.
Bizarrely, the primary cause of the low productivity issues faced by Nigerian farmers can be attributed to various reasons, with the agricultural credit facility (loan) being the most prominent. The majority of farmers in rural areas are involved in subsistence agriculture and face a lack of adequate cash to operate, expand their business, or adopt mechanized farming techniques using modern equipment such as ploughs, tractors, and other labor-saving gadgets. Consequently, they were unable to generate a sufficient amount of food to sustain the continuously expanding population of Nigeria. There is a lack of adequate and restricted sources of funding available to farmers in rural areas to enhance their output (Saheed, 2019). The insufficient allocation of funds to agriculture by both the government and private sectors continues to be a significant obstacle for the sector in realizing its full potential, despite its crucial role as the primary source of employment and catalyst for rural development. According to FAO (2018), around 1.3 billion individuals could be engaged in agricultural work globally, with approximately 97 percent of them residing in poor nations. Given that agricultural products extend beyond meeting basic needs and supplying the food market, the employment stimulus for area economic growth tends to be substantial. Insufficient funding for rural farmers, namely in the study area, hampers their ability to operate efficiently and decreases their involvement, especially after the harvest season, leading to unemployment among many farmers. As stated by Nsikak (2018), there is a high level of employment in the agricultural sector only during the sowing and harvesting seasons. However, the bulk of agricultural workers become unemployed once the harvesting is completed. An efficient agriculture sector undoubtedly facilitates the creation of employment prospects in a country (Ibidun, 2020).
In response to the growing risk of food insecurity and the rapid rise in food costs, which could lead to social crises such as unemployment, the government and its agencies have taken immediate action (Odinta, 2018). To address the increasing food demand of the country's growing population, the government implemented several policies. These policies aimed to achieve self-sufficiency in basic food supply, ensure food security for the entire population, and promote the production of better inputs for local industries. This was done through increased investment in agricultural business and higher budget allocation for the agricultural sector (Falola, 2020). As of December 2017, around N55 billion has been invested in the rice industry under the anchor borrower program of the Central Bank of Nigeria (CBN, 2017). This initiative aims to alleviate the difficulties faced by rice farmers in Nigeria, such as the high cost of agricultural inputs, low crop yield, insufficient revenue, poor quality seedlings, limited access to fertilizers, low market demand, and obstacles related to irrigation and water pumping machinery (Olakundun, 2019).
The Central Bank of Nigeria established the Anchor Borrowers' Programme (ABP) in 2015 to collaborate with anchor companies in the production and processing of important agricultural commodities, as part of its ongoing efforts to combat inflation and unemployment. The Programme aims to assist local farmers in enhancing their production and delivery of feedstock to processors, hence reducing the need for imports and preserving Nigeria's external reserves. Within the Scheme, Anchor businesses act as Off-takers, acknowledging their proven track record and expertise in collaborating with out-growers engaged in production. The Scheme entails a financial model in which the anchor firms, namely CBN, NIRSAL, and State Governments, coordinate the out-growers and assure their adherence to contractual terms, hence minimizing the occurrence of side-selling. The financing institutions act as reliable conduits for providing credit to the out-growers.
1.2 Statement of the problem
Agriculture is crucial for Nigeria's economy, making substantial contributions to employment, food security, and GDP. Nevertheless, the agricultural sector has ongoing difficulties, specifically for small-scale farmers who grapple with restricted availability of financial resources, contemporary agricultural supplies, and market opportunities (Okocha, 2019). These impediments impede their efficiency and earning capacity, affecting the overall expansion of the agricultural industry. The Central Bank of Nigeria (CBN) implemented the Anchor Borrowers' Programme (ABP) in 2015 with the aim of addressing these difficulties and improving agricultural output. According to Akan (2019) the program seeks to establish connections between small-scale farmers and anchor enterprises that engage in the processing of agricultural commodities. The ABP aims to enhance the productivity and profitability of small-scale farmers by granting them access to loans, quality inputs, and technical support (Abasiama, 2020).
Birnin Kebbi, the administrative center of Kebbi State, serves as a prominent agricultural hub in Nigeria. The region is renowned for the cultivation of many agricultural commodities, such as rice, millet, sorghum, and maize. Although Birnin Kebbi possesses significant agricultural potential, farmers in the region have comparable obstacles to their counterparts throughout Nigeria, including insufficient access to financial resources, inadequate infrastructure, and low adoption of contemporary farming methods (Ademola, 2021). Due to the significant strategic value of Birnin Kebbi in Nigeria's agricultural industry, it is imperative to examine the impact of the Anchor Borrowers' Programme on agricultural commodities in this area. The objective of this study is to assess the influence of the Agricultural Business Platform (ABP) on the efficiency, earnings, and sustenance of small-scale farmers in Birnin Kebbi. Although the Anchor Borrower Program (ABP) has been adopted nationwide in the state to bolster agricultural productivity, enhance farmers' loan accessibility, and stimulate economic growth in the agricultural sector by boosting agricultural output via offering smallholder farmers access to affordable finance for essential agricultural inputs, including seeds, fertilizers, and pesticides (Dayo & Ini, 2022). Nevertheless, the program encounters a significant obstacle. In light of this context, the objective of this study is to conduct a thorough evaluation of the impact of the Anchor Borrowers' Programme on agricultural commodities in Birnin Kebbi, Kebbi State.
Objectives of the study
The primary objective of this study is to critically investigate the influence of the anchor borrower program on agricultural commodities in Birnin Kebbi, Kebbi State. Specific objectives of this study are to:
To assess the program's impact on agricultural productivity of rice in Birnin Kebbi
To assess the program's impact on agricultural productivity of wheat in Birnin Kebbi
To assess the program's impact on agricultural productivity of maize in Birnin Kebbi
To offer recommendations based on the findings to enhance the effectiveness and sustainability of the Anchor Borrower Program in Birnin Kebbi
1.4 Research Questions
What is the program's impact on agricultural productivity of rice in Birnin Kebbi?
What is the program's impact on agricultural productivity of wheat in Birnin Kebbi?
What is the program's impact on agricultural productivity of maize in Birnin Kebbi?
What are the to enhance the effectiveness and sustainability of the Anchor Borrower Program in Birnin Kebbi?
1.5 Research Hypotheses
Ho: There is no significant impact of ABP on agricultural productivity of rice in Birnin Kebbi.
Ha: There is significant impact of ABP on agricultural productivity of rice in Birnin Kebbi.
1.6 Significance of the study
The Anchor Borrower Program (ABP) is a major undertaking by the Nigerian government with the objective of rejuvenating the agricultural industry, strengthening food security, and promoting the well-being of small-scale farmers. Birnin Kebbi, known for its significant rice output, is an appropriate subject for evaluating the influence of the Anchor Borrower Program on agricultural commodities due to many factors. The report will function as a fundamental reference point for farmers, politicians, students, and scholars.
Analysing the impact of the Anchor Borrower Program on rice and other agricultural commodities can offer valuable insights into how the program contributes to increasing agricultural production, generating revenue, and fostering general economic growth in the area. Evaluating the impact of the Anchor Borrower Program on agricultural commodities can provide insight into its implications on the livelihoods, income levels, and socio-economic situations of farmers in Birnin Kebbi. Having this comprehension is essential for developing strategies that foster equitable economic expansion, reduce poverty, and enhance the ability of small-scale farmers to withstand challenges.
Moreover, the results of this study can provide valuable insights to policymakers and agricultural development professionals regarding the efficacy of the implementation tactics employed in the Anchor Borrower Program in Birnin Kebbi. The program can illuminate effective strategies, pinpoint obstacles, and propose policy modifications to enhance its influence on agricultural productivity and sustainability.
Moreover, through analysing the effects of the Anchor Borrower Program on agricultural commodities, the study may assess enhancements in market connections, integration of the value chain, and stability of prices for farmers in Birnin Kebbi. These observations are crucial for promoting market-oriented agriculture and improving farmers' ability to compete in both local and global markets. The findings can support the attainment of SDG 1 (No Poverty), SDG 2 (Zero Hunger), and SDG 8 (Decent Work and Economic Growth) by suggesting measures to improve agricultural productivity, alleviate poverty, and foster inclusive economic growth in Birnin Kebbi and similar areas.
In addition, the study can assess the effects of the Anchor Borrower Program on agricultural commodities, specifically in terms of enhancing market connections, integrating value chains, and ensuring price stability for farmers in Birnin Kebbi. These observations are crucial for promoting market-oriented agriculture and improving farmers' ability to compete in both local and global markets.
1.7 Scope of the study
Broadly, this study focus is to critically investigate the influence of the anchor borrower program on agricultural commodities in Nigeria. Specifically, this study seeks to assess the program's impact on agricultural productivity of rice in Nigeria, assess the program's impact on agricultural productivity of wheat in Nigeria and assess the program's impact on agricultural productivity of maize in Nigeria. Further, this study will focus on assessing the program's influence on the income levels and livelihoods of participating farmers in Nigeria and it also seeks to offer recommendations based on the findings to enhance the effectiveness and sustainability of the Anchor Borrower Program in Nigeria. The study is carried out in Birnin Kebbi, Kebbi state, Nigeria.
1.8 Limitations of the study
Like in any human attempt, the researchers encountered several small limits during the investigation. The primary constraint was the dearth of comprehensive literature on the topic, given the scarcity of data pertaining to an investigation on the influence of the anchor borrower program on agricultural commodities in Birnin Kebbi, Kebbi State. Therefore, a substantial investment of time and effort was required to identify the suitable materials, books, or information and to collect data. Also, this study is limited by its diminutive sample size and restricted geographical range, concentrating just on Birnin Kebbi, Kebbi State, Nigeria. Hence, the findings of this study cannot be extrapolated, thereby necessitating additional research. In addition, the researcher encountered a time limitation as a result of the necessity to do this research while simultaneously meeting the responsibilities of attending lectures and engaging in other educational pursuits.
1.9 Definition of terms
Anchor Borrower Programme: The Anchor Borrowers Program (ABP) of the CBN was established in November 2015 with the objective of creating economic linkages between Small Holder Farmers (SHF) and Anchors
Agricultural commodities: Agricultural commodity. An unprocessed product of farms, ranches, nurseries, and forests and natural and man-made bodies of water, that the Independent Producer has cultivated, raised, or harvested with legal access rights
Small scale farmers: The term “smallholder farmers” is typically used to describe farmers who own small plots of land (in Nigeria – less than 5 acres of land) which they use to farm subsistence crops and one or two cash crops.
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