SIGNIFICANT CONTRIBUTIONS OF THE ANCHOR BORROWERS PROGRAMME TO THE PRODUCTIVITY OF RICE FARMERS IN EKITI STATE
| Pages = 54 | CHAPTERS = 1 – 5 |
CHAPTER ONE
INTRODUCTION
1.1 Study Background
Rice is a fundamental food staple and constitutes a major portion of the diet in numerous African countries, with Nigeria being a significant example (Lu et al., 2018; FAO, 2019). Over recent years, Nigeria has experienced a remarkable 70% increase in its rice production, as reported by the United States Department of Agriculture-Foreign Agricultural Service (2019). This impressive growth has elevated Nigeria to the position of the second-largest rice producer in Africa. According to Kehinde et al. (2022), the country currently produces approximately 8 million tonnes of rice annually. However, they suggest that with the implementation of effective strategies, Nigeria has the potential to expand its annual production to 14 million tonnes. This indicates that Nigeria has yet to fully harness its rice production capabilities, resulting in a substantial reliance on imported rice to satisfy domestic consumption needs (Durand-Morat et al., 2019). Rada (2019) defines productivity as the ratio of output to the amount of resources used within a specific timeframe, typically assessed through measures such as the productivity of land (the value of production per hectare) or crop yield (the amount of output per hectare) for one or more crops.
The statistics reveal that Nigeria is the second-largest importer of rice worldwide, following China, with an average annual import of 2.4 million tonnes. This significant importation is due to the fact that domestic rice production is insufficient to meet the high levels of consumption in the country. Umar et al. (2019) point out that the Nigerian government is actively working to combat hunger and reduce the foreign exchange imbalances caused by rice imports by striving to achieve self-sufficiency in rice production. Abbas et al. (2018) emphasize that realizing this objective necessitates strategic investments in various aspects of the rice production process, including production, milling, grading, marketing, and crucial infrastructure such as efficient storage facilities and well-maintained roads. Previous initiatives aimed at enhancing local rice production have faced challenges such as losses, mismanagement, inflated costs, and distribution issues, which have ultimately harmed the farmers who genuinely need support (FMARD, 2018). As a result, farmers have been forced to obtain inputs at higher interest rates, face restricted access to financing, and contend with stringent collateral requirements, among other obstacles.
In response to these challenges, different regions across Nigeria have implemented various strategies and programs to improve agricultural production. In 2015, the government took significant steps to boost rice production, including enacting a ban on rice imports and launching the Anchor Borrowers Programme (ABP). The ABP was designed to connect rice processing companies with small-scale rice farmers, thereby promoting local rice production and improving the overall rice value chain (CBN, 2016). By December 2017, the Anchor Borrowers Programme had attracted approximately 55 billion Naira in investments to the rice sector (Saheed et al., 2018). This program has provided substantial relief to rice producers by addressing many of the challenges related to rice productivity. For instance, in 2018, a loan of 80 million Naira was allocated to 194 rice farmers in Ekiti State as part of the ABP’s efforts to support local agriculture (Leadership, 2018). The ABP aims to foster a mutually beneficial relationship among all parties involved in the rice value chain while simultaneously tackling issues related to poverty and unemployment (CBN, 2017).
Ekiti State, recognized for its strong agricultural orientation, has more than 70% of its population engaged in farming activities, whether on a full-time or part-time basis (Kehinde et al., 2022). The state is known for its traditional rice production, which is a primary economic activity in several regions, albeit at a subsistence level. Approximately 70% of the adult population in Igbemo Ekiti is involved in rice cultivation, according to Aremu and Akinwamide (2018). The growing interest in rice production can be attributed to increasing demand driven by factors such as population growth, rising income levels, and rapid urbanization. Rice produced in Ekiti State is primarily consumed as a staple food and provides a significant source of daily calories and protein (Aremu and Akinwamide, 2018). Milled rice is particularly valued for its convenience and minimal cooking requirements, making it an appealing food option in urban areas. Indigenous rice production has played a crucial role in enhancing food security in both Ekiti State and Nigeria at large. In light of this context, it is essential to assess the impact of the Anchor Borrowers Programme on improving the productivity of rice farmers in Ekiti State and scaling up production to a commercial level.
1.2 Statement of the Problem
In recent years, stakeholders in Nigeria’s agricultural sector have increasingly expressed concern over the poor productivity levels encountered by local farmers. According to Saheed (2018), a substantial number of farmers in rural areas are engaged primarily in subsistence agriculture. These farmers often lack the necessary financial resources to sustain, expand, or transition to mechanized farming methods. This financial inadequacy severely limits their ability to produce sufficient food to keep up with the needs of Nigeria’s growing population. The scarcity of financial resources available to these farmers is a critical barrier to enhancing their agricultural output.
The Anchor Borrowers Programme (ABP) was introduced as a pivotal initiative aimed at improving agricultural productivity, with a particular focus on the rice sector in Nigeria. Despite the implementation of this program, there remains a pressing need to conduct a detailed and systematic evaluation of its specific contributions to the productivity and efficiency of rice farmers in Ekiti State. Although the ABP has been operational for over eight years, providing an ample period for evaluation, there is still a notable lack of comprehensive empirical research concerning its impact on productivity metrics. This research gap underscores the necessity to assess how effectively the ABP has influenced rice farmers’ productivity and to evaluate the broader socio-economic effects of the program on these farmers in Ekiti State. Dori (2018) observed that the Central Bank of Nigeria’s credit schemes have led to an increase in the flow of credit within the economy. This increase in credit could theoretically result in higher productivity, greater job creation, and improved agricultural output. However, previous programs and regulations have not sufficiently addressed the challenges related to the post-harvest handling of rice, which remains an area of concern.
Akinwale (2021) has highlighted several significant limitations associated with the Anchor Borrowers Programme, including erratic weather conditions, difficulties related to transportation, limited extension services, and inadequate financial resources. These factors present considerable challenges to the effectiveness of the ABP. Abiodun et al. (2020) further note that the lack of sufficient transportation networks and storage facilities in rural areas of Nigeria creates substantial obstacles for the program. Farmers often encounter difficulties in transporting their agricultural products from farms to markets due to the presence of impassable or poorly maintained roads, restricted transportation options, and unreliable logistical services (Akinwale, 2021). The problem is compounded by inadequate storage infrastructure, which leads to significant post-harvest losses. These losses result in reduced earnings for farmers and exacerbate food insecurity in local communities. The current state of infrastructure hinders the smooth operation of the agricultural value chain, limiting farmers’ access to larger markets and impeding their ability to fully benefit from their agricultural investments (Abang, 2022). Moreover, Ibukub et al. (2019) identified several additional issues with the ABP, such as a shortage of extension agents, instances of farmers engaging in unlawful sales, and the distribution of defective inputs and seeds.
Despite existing skepticism about the capability of the Anchor Borrowers Programme to enhance the agricultural sector, there has been limited attention given to investigating the significant contributions of the ABP to the productivity of rice farmers in Ekiti State. This highlights a crucial need for further research to fill this gap and provide a clearer understanding of the program’s impact.
Objectives of the Study
The principal aim of this study is to conduct a comprehensive analysis of the Anchor Borrowers Programme and its significant contributions to enhancing the productivity of rice farmers in Ekiti State. The study is guided by the following specific objectives:
- To evaluate the extent to which the Anchor Borrowers Programme has improved access to essential agricultural inputs, such as seeds, fertilizers, and pesticides, for rice farmers in Ekiti State. This involves investigating whether the program has facilitated better availability and affordability of these inputs, which are crucial for increasing rice yield.
- To determine if the Anchor Borrowers Programme has provided rice farmers in Ekiti State with access to advanced farming technologies and modern agricultural practices. This includes assessing the adoption of technologies such as irrigation systems, mechanization (e.g., tractors and harvesters), and other innovations that can potentially enhance farming efficiency and productivity.
- To investigate whether the Anchor Borrowers Programme has played a role in strengthening market linkages for rice farmers in Ekiti State. This objective focuses on evaluating how the program has affected the farmers’ ability to connect with markets, access fair pricing, and integrate into larger agricultural supply chains.
- To assess the impact of the Anchor Borrowers Programme on the income levels and overall livelihoods of participating rice farmers in Ekiti State. This includes examining whether the program has led to improved financial stability, increased earnings, and better living conditions for the farmers involved.
Research Questions
To address the objectives outlined, the study will seek answers to the following research questions:
- How has the Anchor Borrowers Programme influenced access to essential agricultural inputs for rice farmers in Ekiti State? This question aims to uncover whether the program has effectively improved the availability and affordability of inputs crucial for rice cultivation.
- To what extent has the Anchor Borrowers Programme enabled rice farmers in Ekiti State to access and utilize modern farming technologies, including irrigation systems and mechanization? This inquiry seeks to evaluate the program’s impact on the adoption of advanced agricultural practices.
- In what ways has the Anchor Borrowers Programme contributed to enhancing market linkages for rice farmers in Ekiti State? This question investigates whether the program has facilitated better market access and improved the farmers’ ability to engage in commercial transactions.
- What impact has the Anchor Borrowers Programme had on the income levels and overall livelihoods of rice farmers in Ekiti State? This question focuses on assessing the program’s effects on financial well-being and quality of life for the participating farmers.
Research Hypotheses
To measure the effectiveness of the study, the following null hypotheses will be formulated and tested at a 0.05 level of significance:
- H0: The Anchor Borrowers Programme does not have a significant impact on the availability and use of modern farming technologies among rice farmers in Ekiti State. This hypothesis posits that the program has not meaningfully influenced the adoption of advanced agricultural tools and techniques.
- H1: The Anchor Borrowers Programme has a significant impact on the availability and use of modern farming technologies among rice farmers in Ekiti State. This hypothesis suggests that the program has substantially enhanced the use of modern farming technologies.
Significance of the Study
This research is of substantial importance for several reasons. It provides crucial insights that can help inform and shape agricultural policies, support sustainable development initiatives, and improve the welfare of rural communities. The study aims to deliver actionable and valuable information that can guide decision-makers in enhancing agricultural practices and economic resilience in Ekiti State.
The findings of this study will be a key reference for various stakeholders, including farmers, legislators, students, and researchers. They will offer a detailed evaluation of the Anchor Borrowers Programme’s effectiveness in fostering sustainable agricultural growth and addressing the challenges faced by rice farmers. Furthermore, the results can offer valuable perspectives to policymakers and agricultural development practitioners, helping them understand the program’s successes, identify effective strategies, address challenges, and suggest policy modifications to maximize the impact on rice farming productivity and sustainability.
Empirically, this research contributes to the broader understanding of agricultural development and rural transformation in Nigeria. It expands the existing knowledge base and provides a foundation for future research and discussions on successful methods for supporting small-scale farmers and promoting environmentally sustainable farming practices.
Scope of the Study
This study focuses broadly on evaluating the significant contributions of the Anchor Borrowers Programme to rice farming productivity in Nigeria. Specifically, it examines the program’s impact on various aspects, including:
- Access to Agricultural Inputs: Assessing how the ABP has influenced the availability and affordability of essential agricultural inputs for rice farmers.
- Modern Farming Technologies: Evaluating the extent to which the ABP has facilitated access to modern farming technologies such as irrigation systems and mechanization.
- Market Linkages: Investigating how the program has improved market linkages for rice farmers, including access to markets and fair pricing.
- Challenges and Benefits: Identifying the challenges faced by farmers in benefiting from the program and the overall impact on their productivity and livelihoods.
Geographically, the study is concentrated in Birnin Ikere-Ekiti, Ekiti State, Nigeria. This specific focus allows for an in-depth analysis of the program’s impact within a defined area.
Limitations of the Study
As with any research, this study encountered several limitations. A significant challenge was the limited availability of comprehensive literature and data on the specific contributions of the Anchor Borrowers Programme to rice farming productivity in Ekiti State. This scarcity required considerable effort to gather relevant information and data.
The study’s focus on a limited geographical area and a small sample size also constrains the generalizability of the findings. The results may not fully represent conditions in other regions of Nigeria, highlighting the need for further research in broader contexts.
Additionally, financial constraints posed a challenge, as the researcher, being a student, lacked sufficient resources to support themselves financially. High transportation costs, exacerbated by current inflation in Nigeria, further complicated travel to research locations. Balancing research activities with academic responsibilities also created time constraints, impacting the depth and breadth of the study.
Definition of Terms
- Anchor Borrowers Programme (ABP): Initiated by the Central Bank of Nigeria (CBN) in November 2015, the ABP aims to establish economic linkages between smallholder farmers and larger agricultural enterprises, facilitating access to resources and support.
- Agricultural Commodities: These are unprocessed products obtained from farms, ranches, nurseries, forests, and aquatic sources that have been cultivated, raised, or harvested with legal rights.
- Small Scale Farmers: Typically refers to farmers managing small plots of land, usually less than 5 acres in Nigeria, for growing subsistence crops and one or two cash crops.