Fertiliser subsidy removal: Govt plans N400bn support for farmers

Written by  Ifeanyi Onuba, Abuja

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Nigerian Farmer

The Federal Government has concluded arrangements to boost agricultural production in the country by setting up the N400bn Growth Enhancement Programme.

The scheme, expected to cover the next four years, will cushion the impact of the planned removal of fertiliser subsidy in the sector.

These were contained in a blueprint for the sector, which was obtained by our correspondent in Abuja.

The document put the estimated annual cost of fertiliser per farmer at N5,000, while the expected benefit was put at N80,000 per farmer.

“Total cost of the programme is approximately N400bn, while the total benefit of programme is N6.8tn,” the document stated.

The proposed removal of subsidy on fertiliser has generated controversy as most farmers allege that they are not benefiting from the subsidy regime.

The Governor, Central Bank of Nigeria, Mr. Lamido Sanusi, had lent credence to the farmers’ claim last month when he said that subsidy payment to the farmers was a fraud.

But the GES programme, which was endorsed by the Minister of Agriculture and Natural Resources, Dr, Akinwumi Adeshina, will be driven by the private sector and will target five million farmers over the next four years.

Under the programme, the procurement and distribution of seeds and fertiliser will be commercialised and handled by the private sector in order to stimulate a thriving fertiliser and seed industry.

Under the arrangement, support will be provided directly to farmers unlike the era where general price subsidy on fertilisers or seeds was done centrally

The document stated, “No more government distribution of fertiliser and seeds. Private sector will now sell their inputs directly to farmers and build their supply chains to get to the rural areas

“Government will provide risk sharing guarantee to leverage loans from banks to seed and fertiliser companies and agro-dealers. Government will buy back 30 per cent of any stock at the end of the season and will pay 10 per cent achievement fees for companies meeting 100 per cent of sale to farmers.”

The need for the private sector to handle the programme, according to the document, becomes imperative since government’s distribution system is inefficient and subsidises corruption.

“Government must get out of fertiliser distribution. All import and distribution should be done by the private sector,” it said.

SOURCE: The Punch, 15 November 2011. http://punchontheweb.com/