The Federal Government has given a private firm the nod to distribute fertilizer by mobile phone.
The approval was given at Wednesday’s Federal Executive Council meeting.
It was chaired by the Vice President, Architect Namadi Sambo.
The President, Dr. Goodluck Jonathan, who normally chairs the meeting is away in Seoul attending a nuclear energy summit.
Briefing newsmen after the FEC meeting, the Minister of Agriculture, Dr. Akinwunmi Ayo Adesina, said the decision was taken to better the lot of farmers who struggle to get fertilizer.
Adesina said the process should be faster and better now with the approval by FEC.
He said that the process will eliminate corruption, associated with most government processes, and do away with intermediaries.
He also told newsmen that it has also given the farmers the opportunity to pay less for fertilizers and seeds.
Adesina told newsmen after the meeting: “What we are trying to do is to build on Mr. Presidents promise to the country about delivering service. It is not just that government delivers service but it must be done in a way that is transparent, accountable, cost efficient and in a way that also targets those that should be beneficiaries of what government wants to do. Not those that go in between and syphon what belongs to the poor.
“In the case of fertiliser supplies in this country, the country he continued to supply fertilisers through a system where it procures and distributes fertilisers all the way from federal to the state level. That pipeline of procurement and distribution is the problem, because that pipeline does not reach 11 per cent of the farmers. In order words, Nigeria is the only country that I know of that fertilizer has legs and walks away from farmers. So as a result you find a situation that we cannot allow to continue, because government expenditure on fertilizer has continued to rise, but rural poverty is rising at the same time.
“This means the most critical input are not getting to the hands of farmers that need it. So that government’s procurement and distribution is very ineffective, inefficient, not cost effective and is a very corrupt system.
“A lot of the fertilizer ends up in the hands of political farmers and they sell it back to the market at a higher price. Some are taken into neighbouring countries like Niger, Mali etc except the farms of Nigerian farmers. That system has also crippled the private sector from supplying seeds and fertilisers directly to rural areas.
“Why is government distributing seeds and fertilizers and farmers are not getting it? And actually some of the seeds and fertilizers being distributed are not good. A lot of sand, grains being sold as seeds. It is a very corrupt system. So Mr. President, who is transparent in the way he wants things done, has approved that we have to change that system and we have.
“First and foremost, we have taken government out of procurement and distribution of seeds and fertilizers. All seeds and fertilisers now are being sold by the private sector directly to farmers just like it should be.
“The main thing is to help suppliers of seeds and fertilisers to have access to finance to be able to supply the seeds and fertilisers. Let me tell you what government has achieved for this year: Government was able to raise N30 billion through a guarantee facility that the Ministry of Finance has put in place with the Ministry of Agriculture with all the banks in this country.
“That guaranteed facility reduces the risk of lending by the banks and we were able to raise N30 billion to finance the entire seeds and fertilizers supply for the country without one Naira of government money being spent. That is the first time that has happened in is country. Before now, I would have had to sit down and sign N30 billion contract. But we didn’t. It just tells you this government is working differently in a way that we are actually accountable in using money well.
“Second is: Have the banks been paying? Absolutely yes. Look at the seeds supplied for this season, the total amount government guarantee was N2.7 billion. The banks have paid about N2.3 billion to the seed company. The seed is there, the fertiliser is there but government only facilitated the bond. That is major development for us. We were able to get this loan at 7 per cent interest rate because my ministry put up additional facility at the Central Bank to reduce the interest rate from 15 per cent to 7 per cent.
“It is part of government working for the poor, working for the people. So what we are talking about today is how to improve the accessibility and affordability of seeds and fertilizers in rural areas. We have a network of Agro dealers across the country that are all registered. We have suppliers of seeds and fertilizers all registered. We have secured the entire seeds and fertilizers for this season. But for the companies to sell directly to the farmers and not to government as was previously the case.
“Council today approved what is called Electronic Wallet. An Electronic Wallet, which is part of the growth enhancement support system, is one where the farmers will get allocation for seeds and fertilizers by their mobile phones without any intermediary within them. This country has close to 100 million mobile phones and we have conducted a survey of farmers.
“So far we have generated 3.5 million of farmers in rural areas. I am not talking about the urban rich area. We would continue to update that data. We found that 75 per cent of farmers in the rural areas have phones and so we are moving into that Electronic Wallet.
“Here is how the system works: The farmers will get their alerts about the allocation for seeds and fertilizers. They will go to the Agro dealer, otherwise known as the input shop, in their own village and they will send that information to the agro dealer. The Agro dealer, seeds and fertilizers’ suppliers are also on the electronic platform. The farmer is getting a subsidy of 50 per cent and the farmer will pay the balance of 50 per cent, then collect their seeds and fertilizers and the transaction is completed and no money has changed hands.
“We have piloted this system already in 12 states. So this is not theory. This is what is actually working in the ground. We have done it Nassarawa State, Zamfara, Kogi and Taraba in the first set, between 5th and 9th of February this year. I am happy to report to you that the success, even without publicity, is 70 per cent of the farmers getting it. It reached as high as 82 per cent in Taraba state. A second round of pilot test from 7th to 10th of March in Ogun, Ekiti, Anambra, Ebonyi, Akwa Ibom, Delta, Niger and Bauchi States recorded an average success rate of 62 per cent without publicity.
“This is phenomenal because this is the first time in Africa that farmers will be getting subsidised input via their mobile phone. Nigeria is on the leading edge on this. I also want you to know that once the transaction is completed, it gives opportunity to banks to know the farmers. So financial inclusion is better. Secondly, it is easier for you to track who gets what. So monitoring and evaluation are a lot easier. Accountability is a lot easier.
“The private sector will be able to supply directly to farmers, thus building their own supply chains. And most importantly the mobile phones will also become the platforms for extension of service. Market information, extension service will all be done on mobile phone. So, the Electronic Wallet has started. We are doing massive sensitisation. We need the media for a massive roll out.
“We are rolling out in the South West first and then we are going to the North in another two weeks or so.
“Food projection: We have projected that we would have 20 million metric tonnes of food to the domestic food supply within the four-year period and we have given already detailed schedule for rice, cassava, soghum two weeks ago with the state Commissioners of Agriculture.
“On the challenges during the test run, we did encounter some challenges. First and foremost is the issue of the GSM in the rural areas is uneven. In some areas, it is actually good and in some areas it is not so good. What we have decided to do is to use paper voucher. In the areas where GSM technology works, we will use Elect
ronic Wallet. Where it doesn’t work, we will use the back up of paper vouchers. Paper vouchers have worked well before but the only problem with the paper voucher is that we would have stack of papers and it is very expensive to print.
“Secondly, a secondary market can develop from the paper voucher and third you can have corruption in the sense that when you are in putting that paper for payment anybody can put in fake piece of paper and get paid and we don’t want that. The third thing, which is very exciting is the issue of job creation in local governments. We are going to create what is called farmer input help line centres all across the local governments of the country. We will employ two young graduates in each of the LGAs. They will help the farmers if they are experiencing difficulties with the network or paper vouchers.
“So far, for the data base (3.5 million) that we have developed, we have employed 500 of them. From this, in one year we will create 2,000 jobs. The Ministry of Communication is helping us with the mobile companies to work on the networks. Agriculture employs 70 per cent of the population but cannot task them because is actually a lot of poor people. Subsidy is suppose to be for the poor not for the rich. In this year, the FG growth enhancement support will be N13.5 billion for fertilizer and the state will be N13.5 billion. So we are talking of N27 billion. Government will continue to subsidise but for the poor.”