SIGNIFICANT CONTRIBUTIONS OF THE ANCHOR BORROWERS PROGRAMME TO THE PRODUCTIVITY OF RICE FARMERS IN EKITI STATE

CHAPTER ONE

INTRODUCTION

1.1 Background of the study

Rice is a primary food source and makes up a significant part of the diet in many African nations, particularly Nigeria (Lu et al., 2018; FAO, 2019).  Nigeria has experienced a 70% increase in rice output in recent years, according to the United States Department of Agriculture-Foreign Agricultural Service (2019). As a result, it now holds the second position among Africa's major rice producers. According to Kehinde et al. (2022), Nigeria now produces approximately 8 million tonnes of rice per year. However, they argue that by implementing the correct strategy, Nigeria has the potential to increase its yearly production to 14 million tonnes. This suggests that Nigeria has not fully tapped into its capacity to produce rice, hence the substantial influx of imported rice impedes the capacity of domestic rice production to meet the nation's daily rice requirements (Durand-Morat et al., 2019). According to Rada (2019) productivity is commonly described as the ratio of output to the amount of resources utilised within a specific time frame.  Usually, it involves computing the productivity of land (the value of production per hectare) or the yield of crops (the amount of output per hectare) for a single crop or many crops.

From statistics, Nigeria is the second-largest importer of rice, after China, with an average annual import of 2.4 million tonnes. This is because rice consumption in Nigeria exceeds domestic supply.  Umar et. al. (2019) state that the Nigerian government is making continuous efforts to eliminate hunger and reduce foreign exchange imbalances caused by rice imports by aiming to attain self-sufficiency in rice production. Abbas et. al., (2018) emphasise that achieving this goal is only possible by making strategic investments in production, milling, grading, marketing, and providing necessary infrastructures such as efficient storage facilities and well-maintained roads.The previous programs including local rice have been plagued by issues such as the loss, mismanagement, redirection, or distribution of inputs at inflated costs, which ultimately harms the farmers who are in genuine need of them (FMARD, 2018). As a result, farmers have been compelled to get inputs at a higher interest rate, face restricted access to financing, and deal with onerous requirements for collateral, among other challenges. 

Apparently, various regions in Nigeria have implemented diverse strategies and programs to enhance production in the agriculture industry.  In 2015, the government implemented measures to increase rice production. These included imposing a ban on rice imports and introducing the Anchor Borrowers Programme (ABP). The ABP aimed to connect rice processing companies with small-scale rice farmers, thereby promoting local rice production (CBN, 2016). According to Saheed et al. (2018), the rice business has received an investment of around 55 billion Naira through the AnchorBorrowers Programme as of December 2017. The Anchor Borrowers Programme has offered relief to rice producers by addressing many difficulties related to rice productivity. In 2018, a loan of 80 million naira was allocated to 194 rice farmers in Ekiti State as part of the Anchor Borrowers Programme (Leadership, 2018). In order to boost the productivity of farmers, the government facilitated a connection between anchor enterprises engaged in the processing of agricultural goods and small-scale rice farmers through the implementation of the ABP.  The Anchor Borrower Program was established with the aim of promoting a mutually beneficial arrangement for all parties involved in the rice value chain, while simultaneously addressing issues of poverty and unemployment (CBN, 2017).

Contextually, Ekiti state is recognized as a predominantly agrarian state, with more than 70% of its inhabitants engaging in farming activities, either on a part-time or full-time basis (Kehinde et al., 2022).  The state is renowned for its native rice production, which serves as the main economic activity in several areas, albeit at a subsistence level.  Approximately 70% of the adult populace of Igbemo Ekiti is actively involved in rice cultivation, as reported by Aremu and Akinwamide in 2018. The growing interest in rice production is due to the strong demand, which is partly driven by the increasing population growth, income levels, and rapid urbanisation.  Rice produced within the vicinity of Ekiti state is primarily used as a staple meal and serves as a substantial provider of daily calories and protein (Aremu and Akinwamide, 2018).  Milled rice is highly valuable as a convenient and time-efficient food option, particularly in urban settings, as it requires minimal cooking before it can be consumed. Indigenous rice production has significantly enhanced food security in both Ekiti state and Nigeria as a whole. Considering the aforementioned situation, it is crucial to analyse the impact of the Anchor Borrower Program on the enhancement of rice farmers' productivity in Ekiti State, elevating it to a commercial scale. 

1.2 Statement of the problem

In recent times, the poor productivity difficulty faced by Nigerian farmers has been a major concern for stakeholders in agricultural sector. According to Saheed (2018) the majority of farmers in rural areas are involved in subsistence agriculture and face a lack of adequate financial resources to sustain, grow, or adopt mechanized farming methods. As a result, they are limited in their ability to generate sufficient food to sustain the continuously expanding population of Nigeria. There is a scarcity of finances available to farmers in rural areas to enhance their output. 

The Anchor Borrowers Programme (ABP) is a crucial initiative designed to improve agricultural productivity, namely in the rice growing industry in Nigeria. Nevertheless, there is still a requirement to methodically evaluate its distinct contributions to the efficiency of rice producers in Ekiti State. Although the initiative has been put into action, there is a dearth of thorough empirical research regarding Productivity Metrics. It has been more than eight years since the start of the ABP, which is a sufficient amount of time to evaluate the rice farmers' productivity and assess the program's impact on their returns. Additionally, it is important to examine the socio-economic effects of the program on rice farmers in Ekiti State.  In a study conducted by Dori (2018), it was noted that the implementation of the Central Bank of Nigeria's Credit Schemes has led to a rise in the amount of credit flowing into the economy. As a result, there should be a corresponding increase in productivity, employment generation, and agricultural output. One issue that has not been addressed in previous regulations and programs is the post-harvest treatment of rice. 

Akinwale (2021) has found some significant limitations of the Anchor Borrowers Programme, such as erratic weather conditions, difficulties in transportation, restricted extension services, and inadequate financial resources. According to Abiodun et al. (2020), the insufficient transportation networks and storage facilities in rural Nigeria present considerable obstacles to the efficacy of the Anchor Borrowers Programme. Farmers encounter difficulties in moving their agricultural products from the farms to the markets, mostly because of the existence of impassable or difficult roads, restricted transportation choices, and unreliable logistical services (Akinwale, 2021). Furthermore, the inadequate storage infrastructure worsens the problem of post-harvest losses, resulting in decreased earnings for farmers and heightened food insecurity in nearby communities. The current inadequate infrastructure hinders the smooth functioning of the agricultural value chain, hence restricting farmers' capacity to access wider markets and impeding their ability to fully benefit from their agricultural investments (Abang, 2022). Ibukub et al. (2019) identified several issues associated with the Anchor Borrowers Programme, including a scarcity of extension agents, farmers engaging in unlawful sales, and the dissemination of faulty inputs and seeds.  

Although existing studies has doubted the capability of Anchor Borrowers program to improve agricultural sector, little or no attention has been paid to investigate the significant contributions of the Anchor Borrowers Programme to the productivity of rice farmers in Ekiti state. Therefore, the necessity for this investigation arises.

Objectives of the study

The primary objective of this study is to critically investigate the significant contributions of the Anchor Borrowers Programme to the productivity of rice farmers in Ekiti state. Specific objectives of this study are to:

To assess whether Anchor Borrower Program impact access to agricultural input among rice farmers in Ekiti State

To find out if Anchor Borrower Program gives  access to modern farming technologies (e.g., irrigation systems, mechanization) among rice farmers in Ekiti State

To determine if Anchor Borrower Program play a role enhancing market linkages for rice farmers in Ekiti State

To find out if the program's influences the income levels and livelihoods of participating farmers in Ekiti State.

1.4 Research Questions

The following research questions which are in line with the objectives of this study will be answered in this study:

Does Anchor Borrower Program impact access to agricultural input among rice farmers in Ekiti State?

Does Anchor Borrower Program give access to modern farming technologies (e.g., irrigation systems, mechanization) among rice farmers in Ekiti State?

Does Anchor Borrower Program play a role enhancing market linkages for rice farmers in Ekiti State?

Does the program's influences the income levels and livelihoods of participating farmers in Ekiti State?

1.5 Research Hypotheses

To determine the effectiveness of this study, the following research null hypotheses will be formulated to guide the study and it will be tested at 0.05% levels of significance.:

Ho: There is no significant impact of Anchor Borrower Program on access to modern farming technologies among rice farmers in Ekiti State.

Ha: There is a significant impact of Anchor Borrower Program on access to modern farming technologies among rice farmers in Ekiti State.

1.6 Significance of the study

The study is essential for informing agricultural policies, fostering sustainable development, and enhancing the welfare of rural communities. The objective of this project is to produce practical and valuable information that can guide decision-making and support the development of agricultural resilience and economic prosperity in the state. The study will serve as a primary point of reference for farmers, legislators, students, and intellectuals. This information sheds light on the ABP's effectiveness in promoting sustainable agricultural growth.  More so, the results of this study can provide valuable insights to policy-makers and agricultural development practitioners regarding the success of the ABP in Ekiti State. The program has the ability to identify effective strategies, emphasize difficulties, and suggest policy modifications to maximize the impact of rice farming productivity and sustainability.

Empirically, the research on the ABP's impact on rice farming productivity expands the existing knowledge on agricultural development and rural transformation in Nigeria. This serves as a basis for future research and conversations regarding successful methods of assisting small-scale farmers and promoting environmentally-friendly farming techniques.

1.7 Scope of the study

Broadly, this study focus is to critically evaluate the significant contributions of the Anchor Borrowers Programme to the productivity of rice farmers in Nigeria. Specifically, this study seeks to assess the impact of Anchor Borrower Program on access to agricultural input among rice farmers in Nigeria and assess the impact of Anchor Borrower Program on access to modern farming technologies (e.g., irrigation systems, mechanization) among rice farmers in Nigeria.  Further, this study will focus on Investigating the role of Anchor Borrower Program in enhancing market linkages for rice farmers in Nigeria and it also seeks to Identify challenges faced by rice farmers in benefiting from the Anchor Borrower Program in Nigeria. Geographically, the study is carried out in Birnin Ikere-Ekiti, Ekiti state, Nigeria. 

1.8 Limitations of the study

Like in any human attempt, the researchers encountered several small limits during the investigation. The primary constraint was the dearth of comprehensive literature on the topic, given the scarcity of data pertaining to significant contributions of the Anchor Borrowers Programme to the productivity of rice farmers in Ekiti state. Therefore, a substantial investment of time and effort was required to identify the suitable materials, books, or information and to collect data.  The study is also limited by its diminutive sample size and restricted geographical range, concentrating just on Ekiti state, Nigeria. Hence, the findings of this study cannot be extrapolated, thereby necessitating additional research. 

Furthermore, the researcher's restraints were predominantly attributable to financial limitations, as they are a student without a means of revenue to support themselves. The research location's high transportation costs, impacted by current inflation in Nigeria, made it difficult to afford transportation fees.In addition, the researcher encountered a time limitation as a result of the necessity to do this research while simultaneously meeting the responsibilities of attending lectures and engaging in other educational pursuits.

1.9 Definition of terms

Anchor Borrower Programme: The Anchor Borrowers Program (ABP) of the CBN was established in November 2015 with the objective of creating economic linkages between Small Holder Farmers (SHF) and Anchors

Agricultural commodities: Agricultural commodity. An unprocessed product of farms, ranches, nurseries, and forests and natural and man-made bodies of water, that the Independent Producer has cultivated, raised, or harvested with legal access rights

Small scale farmers: The term “smallholder farmers” is typically used to describe farmers who own small plots of land (in Nigeria – less than 5 acres of land) which they use to farm subsistence crops and one or two cash crops.