Investor urges Government To Subsidise Bank’s Interest Rate For Agro-Processing Lending

THE chairman, Harvest Feeds Agro Processing, Goke Adeyemi has asked the Federal Government through the Central bank of Nigeria (CBN) to subsidise the interest rate of commercial banks lending to farmers and agro-processors.

Adeyemi also asked the government to consider granting a waiver for the importation of machines and spare parts for agro-processing especially for cassava processing so that the price of locally processed cassava can compete with the imported ones.

Adeyemi who has a cassava processing factory in Ogun State said “we hope that CBN will focus on real farmer and agro-processors because I have a business that they know about, the CBN has visited us in our factory but I have not benefited anything from them yet despite all the interactions we have had.

“We want the bank’s interest rate to come down to about 10 per cent, which is what I expect from CBN this year.

“The CBN or the federal government can subsidise the interest rates of loans farmers and agro-processors take from commercial banks. So even if the loan attracts a 20 per cent interest rate, the government can take up 50 per cent as a way of subsidy, while the borrower takes care of the remaining 50 per cent. This will spur industrial growth, large agriculture investment and employment generation”.

He said in 2021, starch processing witnessed many crises as the prices of cassava skyrocketed thereby forcing the price of starch to increase. He said due to epileptic power supply, the factory ran on diesel to sustain production.

“Agro-processing also had a lot of challenges in 2021, apart from the challenges of cassava tuber supply, we also have the challenge of the Nigerian economy in 2021, forex to get spare parts for our machines became unavailable and it increased drastically to over N500 to $1.

“The cost of energy was almost more than 100 per cent in 2021, initially, a litre of diesel was going for about N180, but towards the end of 2021, the price increased to N350 per litre.

“The overall is that as the price of our locally produced starch increased to almost N450,000 per ton, the demand from our customers reduced because the price of imported starch remained at about N280,000 to N320,000 per ton, our customers ran away. This affected our output, it affected our incomes, it affected our loans we took from the bank.

“As I speak to you right now, we operated at about 30 per cent to 40 per cent capacity last year. Agriculture financing in 2021 was also a disaster, the commercial bank interest rate is still very high at about 21 per cent to 25 per cent” he said.

He said he has secured fresh 2000 hectares of land for cassava farming that will supply cassava to his factory which he is currently expanding the capacity.

He said this move would create additional 350 direct jobs to the already existing over 200 jobs in his factory and additional 500 cassava farmers would be engaged in the farm.

“We are doing additional backward integration, I have secured about 2000 hectares of farmland in Ogun state and we will be cultivating cassava on it, so the factory will generate additional 350 direct jobs between June and September, and there will be additional 500 cassava farmers that will supply cassava tubers to us for the new installation in our factory”, he added.

source tribuneonlineng.com