Investor wants FG to subsidize bank’s interest rate for agribusiness loans

Harvest Feeds Agro-Processing President Goke Adeyemi has called on the federal government, through the Central Bank of Nigeria (CBN), to subsidize the interest rate of commercial banks lending to farmers and agribusinesses.

Adeyemi also urged the government to consider granting a waiver for the import of agro-processing machinery and parts, especially for cassava processing, so that the price of locally processed cassava can compete with those imported.

In an interview with Online forum, Adeyemi, who owns a cassava processing plant in Ogun State, said: “We hope CBN will focus on real farmers and agro-industrialists because I have a business they know, the CBN visited us in our factory but I haven’t benefited from them yet despite all the interactions we have had.

“We want the bank’s interest rate to drop to around 10%, which is what I expect from the CBN this year.

“The CBN or the federal government can subsidize the interest rates on loans that farmers and agribusinesses take from commercial banks. So even if the loan has an interest rate of 20 percent, the government can take up to 50 percent as a grant, while the borrower pays the remaining 50 percent. This will stimulate industrial growth, significant agricultural investments and job creation ”.

He said that in 2021, starch processing experienced many crises as cassava prices soared, forcing the price of starch to rise. He said that due to an epileptic power supply, the plant was running on diesel to keep production going.

“The agribusiness also had a lot of challenges in 2021, besides the challenges of cassava tuber supply, we also have the challenge of the Nigerian economy in 2021, the forex to get spare parts for our machines became unavailable and it increased dramatically to over N 500 to $ 1.

“The cost of energy was almost 100% in 2021, initially a liter of diesel cost around 180 N, but towards the end of 2021 the price rose to 350 N per liter.

“Overall, while the price of our locally produced starch has increased to almost N 450,000 per tonne, demand from our customers has decreased as the price of imported starch has remained around 280,000 to 320. 000 N per tonne, our customers ran a medium, it affected our production, it affected our income, it affected the loans we took with the bank.

“As I speak to you now, we were operating at about 30-40% of our capacity last year. The financing of agriculture in 2021 has also been a disaster, the interest rate of commercial banks is still very high, at around 21% to 25%, ”he said.

He said he has secured 2,000 hectares of fresh land for cassava cultivation which will supply cassava to his factory, which he is currently expanding capacity.

He said the move would create 350 more direct jobs than the more than 200 jobs already in his factory and that an additional 500 cassava farmers would be hired on the farm.

“We are doing an additional upstream integration, I have secured about 2,000 hectares of farmland in Ogun State and we will grow cassava there, so the plant will generate 350 additional direct jobs between June and September, and there will have an additional 500 cassava farmers. which will supply us with cassava tubers for the new installation in our factory, ”he added.

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