The Minister of Agriculture and Rural Development, Chief Audu Ogbeh on Thursday in Abuja, said plans were on the way to peg interest rate for agricultural lending at five per cent.
Ogbeh, who said this while addressing a news conference, noted that when the interest rate is guaranteed, farmers would have to source for farm inputs on their own.
The minister said the cost of the Growth Enhancement Support (GES) scheme was much and the revenue of the country had become so low hence, government can no longer sustain the scheme.
“We are working towards reducing interest rate to about five per cent in agriculture; we want to develop an agric fund to a level in partnership with the Central Bank of Nigeria (CBN).
“Once we do, farmers will have to find farm inputs on their own; we cannot afford the GES at this cost.
“Many of the states said their resources are so low and they cannot afford the luxury of paying for subsidy on farm inputs for farmers.
“The areas we are paying is out of sympathy and a sense of responsibility for the agro dealers, since they are owed the money, we are looking for money at the federal level to pay the liability of the states.
“The cost of the GES is much and the finances of the country as so lean now that it a luxury we many not continue with,’’ he said.
The GES scheme is a flagship programme of the Federal Government through which registered farmers have access to farm inputs like fertilisers, seeds and agro chemicals at subsidised rate via e-wallet.
The scheme was introduced in 2012 under the Agricultural Transformation Agenda (ATA) with the aim of producing 20 million tonnes of additional food by 2015.
The programme which had registered over 15 million farmers across the country as at 2014 was expanded to include access to heavy farm machineries, loan, agric extension services and insurance.
However, the programme was not rolled out in 2014, 2015 and 2016 leaving the farmers to source farm inputs by themselves.
Ogbeh said the Bank of Agriculture (BoA) is in deficit to a tune of nearly N40 billion in debts stretching back to the past 20 years and measures are being put in place to recover the debts.
He said the bank is structurally weak, not digitalised and its management has to be strengthened.
Ogbeh said a programme is being put in place by the Bureau of Enterprise to restructure and re-energise the bank.
The minister said once that was done, the bank would be run according to International standards and it would be strong enough to lend cheaply to farmers.
He explained that the Federal Government fund in the bank would be about 20 per cent and private sector investment and those of the nearly 25 million farmers in the country will make up the rest.
According to Ogbeh, this will make BoA the biggest bank in the country and will be servicing the rural areas.
The minister said that investors like the Pension Commission, Nigeria Development Bank, the World Bank and others were expected to invest in the project.
Ogbeh said that the President and the Vice President were working hard to actualise the programme within the next nine months, and reposition agriculture sector.