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The yearly N22billion subsidy of fertilizer procurement by the Federal Government was yesterday described as fraud by the Central Bank of Nigeria (CBN) Governor, Sanusi Lamido Sanusi.

Sanusi told the House of Representatives committee on Agriculture that a committee on the apex bank discovered that only about 11 percent of the 'subsidized' fertilizers eventually get to the farmers.

'We have discovered that very few farmers get fertilizers to use, I can say that there is nothing like subsidy, no subsidy, it is a fraud, every thing you spend on subsidy is a waste of time.'

At an interactive session with the committee chaired by Hon Mohammed Moguno on the way forward on how to revive the sector, the CBN governor lamented that the nation's agricultural sector was underperforming and under-funded.

Repeatedly, he said that the fertilizers supplied to farmers do not actually weigh up to 50kg and that half of such bags were filled with ordinary sand.

Because of the fertilizer racket and other sundry factors, banks were reluctant to invest in the sector, saying that transforming the sector will involve multiple approaches from other sectors like power, transportation and research institutes.

To tackle the problems of the sector, he stated that the CBN had designed a technical assistance programme code named Nigeria Incentive Based Risk Sharing for Agricultural Lending (NIRSAL) to 'de-risk' the agricultural value chain in order to build long-term capacity and institutionalize agriculture -lending incentives.

The programme, he explained to the lawmakers will however cost the nation about N1.5 trillion annually.

He stated that money will be a share lending risks between farmers and banks, link insurance products to the loan provided by the banks to loan beneficiaries and build the capacity of banks, micro-finance institutions.

It will also be used to build capacity of agricultural value chains and expand financial inclusion.

Through this new approach adopted by the CBN, Sanusi noted that 'it is difficult to fix the financial value chain until the nation can fix the commodity value chain.'

Sanusi, who was optimistic that with strict compliance with the approach, said that the growth potential was expected to increase yields to 80-100% of benchmark countries because the potentials were on ground.

According to him, it has been projected that there will be an increase in acreage by 14 hectare of new agricultural land, which is the approximate of 38% of Nigeria's unused arable land and a shift of about 20% of production to higher value.

At the beginning of a new century, the CBN governor lamented that Nigeria remains a net importer of agricultural products with imports totaling N630 billion annually.

Hopefully, the present administration can achieve an increase in its output by 160% from N14.85 trillion presently to N34 trillion by year 2030.

He also lamented Nigeria's loss of her dominant position in exports of key agricultural crops like cocoa, groundnuts, ground-nut oil and palm oil since 1960.

'In the 1960s, Nigeria had over 60% of global palm oil exports, 30% of global groundnut exports, 20-30% of global groundnut oil exports and 15 %of global cocoa exports. By 2000, Nigeria global share of exports of each of these crops was 5% or less.'

The CBN governor specifically identified challenges facing the agricultural sector in the country to include underfunded research and development (R&D); lack of infrastructure; inadequate funding; lack of local storage and processing system; threats from pests, diseases and climate change challenges amongst others.

Chairman Mongonu had earlier informed the CBN governor that the interactive session was to address the problems of the sector and proffer solutions to them.