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Anchor Borrowers Scheme and dashed hope of cotton farmers in Adamawa

There have been some unresolved issues and allegations surrounding the implementation of CBN’s Anchor Borrowers Programme between the Apex bank, the lender and the beneficiaries, the farmers.  PADIO PHINEAS digs deeper into the issues in this revealing investigation.


BASED on his enlistment as one of the beneficiaries of the Central Bank of Nigeria, CBN’s Anchor Borrowers Program in Adamawa State for the 2020 wet planting season, James Ezra, had high hopes regarding his newfound occupation. He looked forward to a good harvest during the year as a cotton farmer, especially having been enlisted as a member of the National Cotton Association of Nigeria (NACOTAN).

According to the Economics Of Production (EOP) issued by the CBN, each of the 256,000 smallholders farmers captured under the programme nationwide to cultivate cotton for the 2020 wet season was allocated N158,502 (in kind and cash) per hectare; to be disbursed through the Anchor and Unity Bank.

The tabular breakdown of the EOP, indicated that each farmer would be allocated 25kg of cotton seeds, five bags of fertilizer, 12 liters of assortment of agrochemicals, a knapsack sprayer and 30 empty bags for harvest. The sum of N30,000 was also earmarked for mechanised land preparation and another N30,000 for sundry services on the farm leading to harvest.

Furthermore, the guidelines for the programme shows that upon harvest, benefiting farmers are expected to repay their loans with harvested produce (which must cover the loan principal and interest at 9 percent rate).

However, contrary to Ezra’s expectations of the support that would have boosted his cultivation, he told Nigerian Pilot that he was given only 25kg of seeds, two liters of chemicals and a knapsack sprayer. He said he was not given the promised money and fertilizer.

“Even at that, we got these items after parting with N5,500, paid to NACOTAN as registration fees, besides personally spending over N10,000 transportation fare going forth and back, in an effort to access the inputs”, he alleged during a visit to his farm in Jabbi-Lamba, under Girei local government area of Adamawa state.

NACOTAN chairman in the state, Sale Mohammed Gbalang admitted charging members N5,500, saying, “It’s true our members have paid N5,000 each for membership registration and N500 service charge for officers who will handle disbursement of inputs from the store.” On the delayed supply of fertilizer, Ezra said, “as you can see the farm yourself, it is already at the flowering stage, and today being the 8th of September, 2020, we are yet to see either fertilizer or chemicals for pest control”.

He alleged further, “For me, I can say without mincing words that we were tricked into the program for the benefit of some people. Yes, I make bold to say without any fear of contradiction that the program is not to help smallholder farmers as claimed; but we leave them to God.”

Ezra’s one-hectare cotton farm looked scourged and in need of fertilizer and under heavy pest attack when the reporter visited the farm. Given the look of the crops, it would be difficult, if not impossible, to get a reasonable harvest. This is because the crops have already formed balls with flowers opening. Ezra is one of the beneficiaries of the revolving loan for smallholder farmers of the program in Adamawa, Gombe and Taraba who claimed that they did not get all they were supposed to be given.

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President Muhammadu Buhari, had in November 2015 launched the ABP under CBN to provide farm inputs in kind and cash to smallholder farmers in the country.

CBN’s Director, Development Finance Department, Yila Yusuf, explained that the bank was trying to bring back the glory of textiles of those days where the industry used to employ 10 million people across the country.

Gbalang told our reporter that 27,000 farmers were mobilized for the wet planting season. And going by the EOP, N3,170,040,000, was allotted to the state. During the flag-off of distribution witnessed by our reporter in Numan local government area in early May, farm inputs as indicated in the EOP were distributed accordingly, but to about fifty farmers only. As it was explained, the general distribution would continue in the coming week.

Jibril Aliyu, is one of the lucky farmers who took home inputs as provided in the EOP. “I was given all the items listed in the EOP, except mechanised land preparation or its monetary value which is N30,000 and another N30,000 as I was made to understand”.

Notwithstanding, as at early June when our reporter first contacted him, Gbalang, claimed that inputs were being distributed to all farmers in a week long exercise across the state as detailed in the EOP.

“Here in Adamawa we have 27,000 cotton farmers in our membership and I can confirm that we have commenced the disbursement of the inputs. And we are doing so in strict compliance with the EOP as handed to us by the Central Bank”, he added.

No CBN officials monitored the disbursement, as observed by our reporter. Our reporter then went to the Yola branch of the apex bank to find out why no official of the bank was assigned to monitor disbursement. At the bank, an official simply replied, “we don’t speak to journalists on any matter at this level; you may wish to go to Abuja”, he said.

Auwal Bawuro, in the same cluster group as Ezra, also told Nigerian Pilot that all he got were cotton seeds, a knapsack sprayer and two liters of chemicals. “Going by the EOP of the loan scheme, a tractor should have ploughed my land in the first place. But that never happened anywhere as I know of in this state. We handled the expenses on our own and ploughed the fields.

Bawuro also flagged another problem: even the seeds distributed are suspected to be bad. “It’s widely suspected that the cotton seeds were substandard, because in my cluster group of about 50 farmers, we all had problems with germination, except one person. Like me, so many of us had to buy cotton seeds from the market to plant.

“Sadly, NACOTAN fertilizers and other inputs are yet to be given to us as at September 8, 2020”, the farmer lamented, alleging that, “they are being smuggled out to Cameroon on a daily basis”.

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Amos Marato, Jummai Sajo and several other farmers interviewed in Song, Numan, Demsa, Yola-North and Fufore local government areas had the same tale of discontent. For Marato, joining NACOTAN was regrettable. “I abandoned my traditional crop cultivation, which used to be maize and sorghum to venture into cotton production.

“We were told to join NACOTAN so we could access government funds to cultivate cotton for a ready market, but as it is I regret abandoning my former major, which is maize. Practically, I got only seeds and two liters of chemicals from what was promised and as it is, I had to plant beans among the cotton, so as to minimize loss,” he said.

Dauda Murke said he used personal money to buy fertilizer and agrochemicals for pest control because, “my cotton farm looks promising, so I wouldn’t sit back waiting for their endless promises”.

Asked why all the items listed on the EOP have not been given to the farmers and why the distribution was in segments; Gbalang responded that  “disbursement of inputs for the 2020 season is different from how it was done last year; in 2019, farmers got everything at once but 80 per cent of them sold off the inputs.”

“Given the experience, NACOTAN headquarters directed all state branches to disburse according to prevailing needs in installments. The measure was to ensure the inputs are taken to the farm and not sold.

“We took this decision because as the anchor, the responsibility of loan recovery lies with us. That is why we set up a committee to visit all the farms to confirm existence so we would deliver the inputs to actual farmers. Those who utilized the initial inputs collected were given fertilizer and agrochemicals, but those who didn’t were denied the remaining items.

“For example, in Mayo-Belwa local government area, 500 farmers took the initial disbursement, comprising cotton seeds, knapsack sprayer and two liters of chemicals. But we verified only nine persons cultivated cotton”, he said.

Asked to further explain why NACOTAN failed to provide a tractor for land preparation as indicated in the EOP to start with, the chairman said the program was facing many challenges. “Mr. Journalist, I cannot answer every question, please. Do you know that government officials have asked me to take three and a half trailer loads of fertilizer to myself, and the burden of recovery be lifted from us, but I refused?

When asked to name which government official or agency offered him a bribe, he declined saying “I don’t want to further talk about that, please. I declined the offer because I’m a God-fearing person; I cannot accept a bribe. I refused personal enrichment with public resources.

“Granted, its true that CBN provided N30,000 for land preparation, and I can confirmed that land preparation was not done; it means therefore that the amount would be deducted from the loan principal during recovery. Sincerely, there are issues with the program, so complicated, such that even the end-users, the farmers themselves are part of the problems. Yes they are; I can testify that I saw how some of them collected and sold the inputs right there and then,” he stated.

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Ezra, Bawuro and Murke, have vehemently denied the allegation. “In the first place why didn’t they (NACOTAN) prepare the land for us and how would they want to convince Nigerians and the government in particular that they didn’t plan for failure?

“Government provided N30,000 for mechanised land preparation but they kept it, why? Was the provision not made based on needs assessment”, Ezra asked.

Regarding the allegation of inducement by government officials, findings indicate that no government agency was appointed to monitor the disbursement. NACOTAN took delivery of the facility on behalf of its members from CBN and is expected to effect recovery.

Mixed blessing in Taraba State

In Taraba State, a total of 4,276 farmers were mobilised, according to the state Chairman of NACOTAN, Bayero G. Bashir. Going by this figure and relying on the EOP, the sum of N677,754,552  was deployed to enhance cotton production and to create jobs in the state.

“I may not have all the figures handy, but I confirm that we took delivery of inputs proportionate to our membership. Yes, we were given everything spelt out in the EOP according to our membership registration, which is 4,276”, Bashir said.

Like his Adamawa state counterpart, Bashir told our reporter that inputs were disbursed in line with CBN’s EOP, but he admitted there were problems with the seeds. He noted that a germination problem was encountered initially and many farmers had to plant as many as three times before it germinated. Nonetheless, he blamed the lack of early rainfall on the problem.

However, some of the farmers interviewed across the state contradicted the chairman on the distribution of inputs. They confirmed receiving only 25kg of seeds, a knapsack sprayer and 2 liters of chemicals.

Farmers from Bali, Gassol, Ardo-Kola and Jalingo local government areas, lauded the Anchor Borrowers Program, but lamented none delivery of farm inputs to them, as of September 4, 2020. Vakoro Kilyobas, a member of NACOTAN from Ardo-Kola, narrated his frustration thus: “its been quite frustrating for me, because right from planting, it has been problems. I had to plant three times before it germinated.

“And as you can see for yourself, it is already at flowering and ball formation stage, yet we hadn’t been given either fertilizer or chemicals for pest control. Government needs to take this programme seriously by delivering all the inputs to us latest by the end of May. They keep telling us inputs are coming, but this is September already, “ he stated.

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Adamu Abubakar, a farmer from Gassol said, “as a first-timer, I can tell you the Anchor Borrowers Program is a laudable one. But the problem is that up to this time of the year, (September) we have yet to access fertilizer and chemicals for pest control; that is not good for cotton cultivation. As a matter of fact, I had to borrow from our locally arranged neighborhood lean season savings to buy fertilizer. And as it is, I may have to resort to the same facility for pest control”, he said.

For Abdullahi Sani, from Jalingo, “the Anchor Borrowers Program, can revolutionised cotton production, but government must find a way to deal with farmers directly. Because this is September already and besides the initial seeds and two liters of chemicals, farmers don’t have fertilizer and pest control”.

Also, Emmanuel France from Ardo-Kola, lamented, “if I had known by now (September) there would be no fertilizer and agrochemicals, I wouldn’t have accepted the seeds and two liters of herbicides. It would have been better to tell us, take seeds, go and source the remaining inputs”, he said.

When asked about the farmers’ complaints, Bashir, said, “It’s true we have yet to distribute fertilizer and the remaining chemicals, but we’ll do so in due course”. He was however not specific on when is due course.

Gombe case slightly different

The Gombe State NACOTAN chairman, Abubakar Bappi, said 7,000 members of the association have benefitted from the ABP loan disbursement. According to him, the sum of N1,109,514,000 was sunk into cotton cultivation in the state. Bappi, assured that the distribution of farm inputs was done as specified in the EOP. Farmers interviewed in Billiri, Kaltungo, Yamaltu-Deba, Gombe and Chongom local government areas, admitted collecting all the farm inputs.

Ali Bogo, a NACOTAN member in Gombe, told our reporter that he was given 25kg of seeds, five bags of fertilizer, a total of12 liters of assorted agrochemicals.

“I can confirm that all of us in Gombe local government have taken delivery of all the items I’ve just listed, what is left out is the cash components” he said. Asked why land preparation and N30,000 cash were omitted in the disbursement, the Gombe Chairman, said, “there is no such provision of cash in the program. If you claim that you saw money provided in the EOP, then it means you misunderstood the documents”, he said.

When told that his Adamawa counterpart admitted that cash components have been itemised in the EOP, he retorted, “I’m Chairman of Gombe and not Adamawa; for me, I don’t know about that”.

Experts’ view on non-release of critical inputs

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Commenting on the implications of non-disbursement of fertilizer and other crucial inputs, an agronomist, Ibrahim Gunda, observe that with the current situation, government might have pumped money down the drain as it would be difficult to recover the loans.

It simply means the program will not make the desired impact on one hand and, on the other, it would be difficult, if not impossible, to recover the loan”.

For Vanye Barau, an economist and a financial expert, there could be a problem with the program, which might need to be reassessed: “If this is true, then there is a fundamental problem with the program. Presumably, the loan was packaged based on needs assessment; so to not carryout land preparation and to not deliver fertilizer, it means there is no programme.

“No rocket science knowledge is required to know that no agricultural venture is done this way anywhere in the world. We can only conclude that the lender is not interested in recouping his money,” he said.

Suspected CBN’S complicity in loan recovery fraud

A Yola-based risk management expert, Garba Donald, said recouping billions of naira granted small holder farmers in the federal government’s Anchor Borrowers Programme may be difficult, considering the implementation of the project.

“It is instructive to note that despite the huge funds committed to the revolving loan scheme, the apex bank has been conspicuously silent on the loan performance. It does not comment on its inability to recover the facilities from the farmers or anchors as the case may be.

“It does not even seem to be interested in evolving pragmatic measures that can raise the recovery levels. Instead, as drum beats are already sounding, the COVID-19 outbreak may likely take the blame for this year’s inability to recover the facilities,” Donald observed.

Similarly, another financial expert, Hassan Bauchi, recalled that in December 2019, the House of Representatives investigated the non-recovery of over N81 billion from defaulting anchor companies, adding that “even that has yet to yield any desirable outcome of public benefit.

“The entire ABP is operating without legal backing that can guarantee loan recovery. Usually, when a facility is given without collateral, it means the lender has assumed responsibility for the risk involved”, he said.

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Speaking on the programme, the Commissioner of Agriculture in Adamawa State, Dishi Khobe, said, “it is not our own as such we have no stake. On whether farmers were shortchanged, we do not have any official complaint about it yet”, he said.

When contacted, the Acting Director, Corporate Communications, CBN, Osita Nwanisobi, dismissed the allegations, saying, “CBN can never be part of this. Let me commend you for this patriotic investigation of the performance of the Anchor Borrowers Programme. “I assure you that we’ll set up a machinery to investigate the claims, after which I’ll make the findings available to you”, he said.

Another official of the apex bank introduced as the team-lead on NACOTAN relations, and simply identified as Khadiri, stated that the only outstanding issue about the programme is about the N30,000 that was not paid to farmers for mechanisation. The companies, according to him, were contracted to carry out the mechanisation.

“As I’m talking with you, we realised last week that some of the farmers carried out mechanisation themselves. They’ve written to us about all the farmers that carried out mechanisation themselves.

“And we said all the contractors that did not do mechanisation under NACOTAN would not be paid money because we are still in the process. That money would be credited to those framers’ accounts.

“What Unity and Keystone Banks are trying to do is that the money would be credited to the accounts of those farmers. When the money is credited to their accounts, rather than paying the loan of N181,000 it would be deducted from their repayment”, he said.

On alleged diversion of fertilizer, he said, “in locations where they didn’t get their inputs early, we told them that these are the problems: we had issues getting security clearance because you cannot move NPK to a place like Yola”.

When told that fertilizers were brought at the same time as cotton seeds and that NACOTAN fertilizers were seen in the markets and also taken across the border, Khadiri said that such situations are dealt with accordingly when discovered.

“You can go to Zamfara and confirm; a man stole fertilizer there and was arrested by the police and the fertilizer recovered”. Instead of writing about the allegation, Kadiri asked to set up a meeting with NACOTAN so that they can be confronted with our reporter’s findings.

*This investigation is supported by the John D. and Catherine T. MacArthur Foundation and the International Centre for Investigative Reporting

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This report is published with permission from Nigerian Pilot.

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