President Bola Tinubu has approved N550 billion for the Bank of Agriculture (BoA) to support smallholder farmers and help stabilise food prices across the country.
The funding includes N250 billion for the Renewed Hope Smallholder Support and Value Chain Programme, while N300 billion has been set aside for a Guaranteed Minimum Price initiative aimed at preventing sharp increases in food prices.
Speaking during an interactive session with agricultural correspondents, the Managing Director of the Bank of Agriculture, Ayotunde Sotinrin, explained that the bank does not lend directly to individual farmers. Instead, it works through accredited farmer aggregation companies such as AFEX, ThriveAgric, and Arziki Noma, describing the model as more efficient and less risky.
According to him, the Guaranteed Minimum Price programme allows the bank to purchase farm produce during harvest when prices are low and release the produce later to the market whenever prices begin to rise. He said this strategy is designed to protect both farmers and consumers.
Sotinrin disclosed that about 500,000 farmers have already benefited from the pilot phase of the programme. He added that four per cent of the intervention fund was used to insure the project against weather-related risks, ensuring that the bank would not suffer major losses if crops failed.
He also revealed that the bank has fully digitised its operations by introducing a new payment card and digital wallet for farmers. Through the wallet system, government can credit farmers with fertilisers, seeds and other farming inputs, which they can redeem at designated collection centres using point-of-sale terminals.
The BoA boss said the bank has also introduced a Know Your Farmer (KYF) system powered by artificial intelligence to automate payments, verify beneficiaries and monitor transactions with aggregation companies, eliminating the need for manual verification of millions of farmer accounts.
Sotinrin said major reforms became necessary after he assumed office about a year ago, describing the bank as outdated and operating more like a government department than a financial institution. He said the institution has since been restructured, recapitalised and repositioned to better serve Nigeria’s agricultural sector.
He noted that financing over 70 million smallholder farmers individually was unrealistic, which informed the decision to work through farmer aggregators instead.
On the bank’s Ginger Revitalisation Programme, he said about 4,000 farmers affected by ginger blight disease had been supplied with disease-free planting materials. Under the arrangement, farmers return three bags of ginger for every bag received, allowing tissue culture laboratories to multiply healthy seedlings.
He said the bank aims to increase Nigeria’s annual ginger production from 500,000 tonnes to five million tonnes, while boosting export earnings from $200 million to $2 billion. Plans are also underway to expand ginger cultivation beyond Kaduna, Nasarawa and Plateau states.
Sotinrin explained that the bank’s mechanisation programme focuses on financing service providers rather than giving tractors directly to farmers. He said the goal is to deploy 2,000 tractors, which will provide mechanised farming services to about 1.2 million farmers while repaying the loans through their operations.
To tackle post-harvest losses, the bank also plans to introduce battery-powered cargo tricycles capable of transporting between 2,000 and 3,000 kilograms of produce from farms to storage facilities.
He further disclosed plans to establish one-stop agricultural service centres in farming communities, where farmers can access tractor services, purchase farm inputs, aggregate produce and carry out banking activities in one location.
Sotinrin said the reforms mark the transition to “Bank of Agriculture 2.0,” stressing that the institution is focused on sustainable financing, technology-driven solutions and building a profitable agricultural sector rather than operating as a charity.
