The Agriculture Marketing Authority (AMA) has received all regulatory approvals to raise $100 million through agro-bills to support increased agricultural productivity.
The agro-bill will provide affordable financing to farmers in horticulture and oilseeds (cottonseed, sunflower seed, soya beans, groundnuts, and Sesame) production.
The bill’s financial partners are AFC Commercial Bank.
Farmers who have registered with the marketing authority and meet other prescribed requirements will be eligible to receive agricultural loans under the facility.
AMA chief executive Mr Clever Isaya encouraged smallholder farmers across the country to take up the loan for maximum profitability from their horticultural farming.
“Finance is required to intensify agricultural productivity. The commercial success of horticulture is underpinned by access to inputs, adherence to best practices and access to market information and knowledge. The latter is now easily available thanks to advances in technology,” he said.
The initiative is part of AMA’s strategy to facilitate and structure finances through various instruments to support production and marketing of agricultural products.
The loans are set to promote development of the horticultural sector as espoused in the Horticulture Recovery and Growth Plan. Increasing access to affordable financing is one of the major drivers of the ongoing agricultural transformation process.
Horticulture is one way that the country can use to penetrate and exploit the high-value export market. Already, macadamia nuts, sweet potatoes and avocados have proved to have high demand on the export market, and these can be cultivated with minimal resources.
It also enhances diet through the provision of a variety and nutritiously rich food essential for a balanced diet.
The Presidential Rural Horticulture scheme has already laid a solid foundation for tapping into rural agricultural potential. Interventions such giving rural households plant material for sweet potato and cassava, establishment of village nutrition and income gardens and youth orchards have helped to increase income and improve livelihoods.
The commercial success of horticulture is underpinned by access to inputs, adherence to best practices and access to market information and knowledge. The latter is now easily available thanks to advances in technology.
Experts say it is prudent for smallholder farmers across the country to apply for a loan to achieve maximum profitability from their horticultural endeavours.
The 2020/21 agricultural season production outlook shows a reversal of negative trends which had saddled cash crops over the past years.
The country is expecting a soya bean harvest of 71000 tonnes, up from 48 000 tonnes in the prior year, representing a 51-percentage change. Similarly, cotton and groundnuts also have high output projections compared to previous years.
This is a clear demonstration of the impact of several results-oriented programmes implemented under the Government’s Agricultural Recovery Plan.
Smallholder farmers have a key role to play in topping up what is being produced by commercial oilseeds farmers. Capacitating farmers with finance will lead to an increase in national output and provide a local and cheaper source of crude oil. This is one way the country can hedge itself from crude cooking oil price shocks on the international market.
There is a lot that goes into ensuring that a smallholder farmer achieves success. And financial access is one tool and effective way of sustainably improving output.
The Agricultural Finance Corporation Holdings and its subsidiaries including the land bank and risk insurance needs to be adequately capitalised to fulfil provision of financial services to all eligible farmers as outlined in the National Development Strategy 1.