Managing Director of the Nigeria Incentives-Based Risk Sharing System for Agricultural Lending (NIRSAL), Mr. Aliyu Abdulhameed, has restated the organisation’s commitment to its mandate to encourage increased agric financing and private sector investment in commercial agriculture by de-risking the agricultural value chain. This follows the launch of the ‘Farm to Market’ scheme to provide an efficient transport and logistics link between primary producers of agricultural produce in the North and markets in the South using rail. The produce include livestock, grains and perishables.

At the flag off of the first component of the scheme – North to South transportation of cattle by rail on Thursday, Abdulhameed said, “The scheme is only a first in a series of smart, tested, targeted and strategic interventions that NIRSAL in partnership with reputable private sector players or investors’ hopes to implement to bring efficiency, transparency and predictability to agribusiness. The scheme aligns wholly with NIRSAL’s overarching objective as a facilitator of finance to the agric sector for the development and application of impactful initiatives as well as well researched, well thought through and proven solutions to problem areas across the key elements in the entire agricultural value chain.

“We made a pledge to – within a short time span - commence the first component of the scheme which is the transport of livestock by rail from the north to the south with an initial focus on cattle.

“And as promised, NIRSAL is here today to deliver on that promise with the technical partner and operator, Connect Rail services, Nigeria’s pioneer bulk freight logistics services provider with the cooperation of the Nigeria Railway Corporation.

“Earlier in the day we witnessed the loading of 500 cows into 15 wagons for movement to the popular Oko-Oba market in Lagos by rail. The rail wagons are properly fitted for livestock transportation and there is sufficient roughage, medical supplies and personnel on board to ensure that the cattle arrive their destination strong, healthy and in a state that commands good market value for their owners. The trip is expected to take two days.

“This signals the beginning of regular rail transportation of cattle and other livestock from the North to the South with major positive implications for the economic as well as security fronts.

“On the economic front, the immediate benefits to livestock breeders is of cheaper cost of moving their cattle to Lagos; significantly reduced chances of injury or death of cattle while in transit and preservation of the market value of cattle.

“According to latest estimates, the value of the North east to Lagos cattle trade market alone is estimated at N324 billion per annum. This does not include the North to South-east cattle trade or the trade in small ruminants (sheep and goats). The total live animal trade between Northern and Southern Nigeria is about N850 billion to N950 billion per annum.

“Related to this, the increased efficiency that the rail system of transportation plus the improved transport logistics brings to the multi billion naira cattle business/trade between the North and the South guarantees for livestock breeders’ higher profit margins, greater incentives to increase productivity and greater pride in their trade. This will not only have a direct and profound effect on the quality of life of cattle breeders but they will give them greater incentive to produce more.

“On the security front, the movement of livestock will help to reduce incidences of cattle rustling, herdsmen and farmers clash which are a source of serious concern to the Buhari government.

“While we acknowledge that the movement of cattle by rail is in itself a historic initiative, our plan is to quickly transit to moving actual beef in refrigerated containers from state of the art abattoirs in the North to the South by rail as it is done in developed countries.

“Now a lot of people may ask why NIRSAL is involved in a Farm to Market Scheme: I had answered this question in my speech at the launch event and will repeat it here for the sake of emphasis and for those who were not there.

“The answer is simple: transportation and the logistics of moving agricultural produce and livestock from farms or ranches to markets is a critical aspect of the agricultural value chain that NIRSAL is set up to fix and make more efficient. And as we all know road transportation of agricultural goods is costly, leads to spoilage and wastage, loss of earnings by farmers, deterioration of the value of farm produce amidst several other challenges. It is a key reason for the high level of post-harvest losses experienced by farmers and a key reason why banks are not interested in lending to the agric sector.

“The farm to market scheme is therefore designed to introduce efficiency in this critical logistic element of the agricultural value chain to fix gaps that affect the profitability of Agribiziness and its capacity to attract financing from banks.

“It is our hope that with the implementation of this scheme cost and time of transporting goods from north to south will reduce by about 20 percent while wastage and spoilage of agricultural produce will reduce by over 40 percent.

“This will no doubt result in wealth creation for farmers and allied industries, job creation, inclusive economic growth farmers and small scale Agri-business entrepreneurs, diversification of national revenue and GDP amongst other benefits.

“Again, we are doing this because it is part of our core mandate which is to guarantee bankable projects that can solve problems in the agricultural value chain. Produce that cannot be delivered affordably, on time and in good condition cannot generate full Naira value commensurate with investment in time and money. As NIRSAL, if we cannot derive optimal naira value for investment, the banks will not be able to establish a connection on how to get their money back which impairs bankability.

“Related to this, with efficient logistics and speed to market, the risk of product damage, spoilage or loss is significantly reduced.

“We cannot conclude without talking about the track record of our partner Connect Rail Services and its Managing Director Edeme Kelikume CEO, whose technical passion, technical competence and robust entrepreneurial drive have been very useful to the development of this initiative.

“To conclude, I will like to reiterate that the launch of the Farm to Market scheme could not have been possible without the vision of President Muhammadu Buhari who has made agriculture a critical plank of his administration. His leadership and support has been the driving force of all that we do.

“I will also like to deeply thank the Central Bank Governor, Mr. Godwin Emefiele for his committed leadership and support in ensuring that we deliver on the mission for which NIRSAL was set up.

“My sincere gratitude also goes to the active support of Chief Audu Ogbeh, the Minister of Agriculture and Rural Development (FMARD) who has recognised the relevance of NIRSAL and is providing even greater policy space for NIRSAL intervention within the framework of the agricultural policy of this administration.

We are deeply appreciative of the presence and support of our generous host the Governor of Zamfara State.”

Abdulhameed also expressed NIRSAL’s committed to identifying and providing practical solutions to the problems that exist in the agricultural value chain in line with President Buhari’s commitment to diversifying the economy.

Update news