New BOA Policy Targets Food Price Stability Through Crop Purchases

News in brief:

-Nigeria's agriculture bank will buy surplus staple crops from farmers whenever market prices fall below government-approved thresholds.

-The initiative also includes tractor deployment, digital farmer financing, and a ginger revival programme using tissue culture technology.

The Bank of Agriculture (BoA) has unveiled a new food price stabilisation initiative to protect farmers from market volatility, reduce post-harvest losses, and improve food security across Nigeria.

Managing Director of the bank, Ayodeji Sotinrin, disclosed the plan during an interview, describing it as part of the agricultural reform agenda of President Bola Tinubu, focused on strengthening farmer welfare and stabilising food supply.

Guaranteed Minimum Price System

Sotinrin explained that the programme would operate through a Guaranteed Minimum Price (GMP) mechanism under which the government would establish a price floor for staple crops such as maize, rice, soybeans, and cassava.

Under the arrangement, the bank will purchase excess produce directly from farmers whenever market prices fall below the approved benchmark.

He said the commodities would then be stored in the country’s 33 silos for future release into the market as part of broader food price stabilisation efforts.

According to him, the initiative is designed to shield farmers from exploitative pricing practices while ensuring a stable supply of food nationwide.

“A key pillar of the plan is the introduction of a Guaranteed Minimum Price mechanism to address the long-standing gap between production costs and farm-gate prices,” he stated.

Sotinrin added that the programme would be implemented as a nationwide campaign with extensive public sensitisation across multiple media platforms.

Bank Shifts to Digital Farmer Financing

The bank's boss also announced a transition from traditional direct micro-credit disbursement to a digital financing ecosystem driven by farmer aggregation companies.

He explained that the bank is leveraging digital platforms alongside identity verification systems such as Bank Verification Number (BVN) and National Identification Number (NIN) to rapidly onboard farmers into the financial system.

According to him, the approach is intended to ensure that financial support reaches genuine farmers rather than middlemen.

Mechanisation and Ginger Revival Programme

Sotinrin noted that mechanisation remains a major priority for the bank, citing Nigeria’s low tractor density of 0.27 tractors per 100 square kilometres.

To address the challenge, he disclosed that BOA has deployed 2,000 high-durability tractors sourced from Belarus to mechanisation service providers capable of covering at least 600 hectares each.

The initiative is expected to support more than 1.2 million farmers during the current wet farming season.

He further revealed that the government had launched a ginger revival programme following the fungal disease outbreak that affected the crop in 2023.

FG Pushes Data-Driven Agricultural Reform

Sotinrin further disclosed that the Tinubu-led administration has approved the creation of a permanent National Farmer Data Registry to enable targeted support for farmers through health insurance, crop insurance, and other intervention programmes.

Beyond the new bank's reforms, the government has prioritised large-scale financing and technology-driven agricultural initiatives aimed at improving productivity and profitability across the sector.

The current policy direction emphasises mechanisation, digital agriculture, and stronger research-to-market linkages to drive agricultural growth nationwide.