The Nigeria Incentive-Based Risk-Sharing System for Agricultural Lending (NIRSAL) has launched a unique farming model designed to simultaneously empower smallholder farmers and boost agricultural production on a structured and sustainable basis.
Formally launched at the Obafemi Awolowo University, Ile-Ife, Osun
State on Monday, Farm Aggregation Model for Smallholder Agriculture
based on Technology (FAM-SMART) is a rules-based, market-led and
technology-driven system of primary production agriculture which would
provide comprehensive financing to support farmers by anchoring them
with input suppliers, mechanization service providers, market, and
financial Institutions.
NIRSAL said the model was designed for smallholder farmers anchored on
three principles; Aggregation; Structured group dynamic; and
proportionate cost and profit sharing in order to achieve economies of
scale, maximum output and maximum profit.
NIRSAL has established Geo-cooperatives in different parts of the
country will serve as the operational hubs for FAM-SMART and the
company plans to set up 16,000 of them in the immediate to medium
term.
READ ALSO: NIRSAL commences distribution of farm inputs to women in Uyo
Though NIRSAL has rolled out several FAM-SMART Projects in a number of
locations across the country, the Ife project is the first to be
launched publicly.
The company estimates that a conservative estimate of 1000
geo-cooperatives producing a gross output of 1,250,000 metric tonnes
of grain would generate a gross revenue of N125 billion and
underscores the immense potential profitability of the FAM-SMART
concept.
Managing Director of NIRSAL, Aliyu Abdulhameed said FAM-SMART concept
is a new paradigm in agricultural primary production in Nigeria.
“The concept and philosophy behind the model, which is what we are
launching today, is such that provides a structured production system
that is almost entirely driven by technology end to end which makes it
attractive to service and input providers and more importantly,
rewarding for smallholder farmers,” Abdulhameed stated.
“Based on a projection that between 80 to 90 percent of a typical per
hectare cost of any production is made up of input and services that
can be institutionally supplied in a structured business model enabled
by NIRSAL Credit Risk Guarantees and other strategic institutional
support, FAM-SMART is an attractive investment opportunity for banks
and the entire financial services sector.”
A key player of the FAM-SMART is the plan to source for direct
large-scale off-takers to purchase produce at market friendly rates
that will benefit farmers, thus providing an assured, stable and
sustainable market.
Abdulhameed stressed that NIRSAL’s focus on smallholder farmers is
central to the mission of the corporation because they make up the
overwhelming proportion of farmers in the country.
He revealed that so far NIRSAL has trained over 700,000 farmers on
good agronomic practices and financial education and provided high
quality agricultural inputs and affordable finance to more than
500,000 smallholder farmers under the three (3) farming seasons from
2017 to 2018.
In his remarks at the event, OAU Vice Chancellor, Eyitope Ogunbodede
expressed the appreciation of the institution to NIRSAL for initiating
the FAM-SMART project in the university. Recalling the central role
that the university played in achieving the agricultural successes of
the old Western Region, stated that OAU is both qualified and prepared
to maximize the opportunity.
“This opportunity with NIRSAL has provided the opportunity to train
our students in the Faculty of Agriculture to acquire practical
experience in mechanized agriculture and agribusiness.”
The Vice Chancellor urged NIRSAL to keep its word to expand the
project to 1000 hectares because the university has the land available
for the purpose.
According to NIRSAL, “the game-changing features of FAM-SMART include;
Fully mechanized and controlled primary production cycle from land
preparation to harvest and primary storage thereby eliminating
drudgery associated with the business-as-usual manual cultivation
practices.
It would also employ the use of satellite imaging, geospatial mapping,
remote sensing and Unmanned Aerial System (UAS) supported with
multispectral imaging technology for monitoring and measuring of field
performance.
Another feature is the Co-funding and profit sharing by all suppliers
of Mechanization, Inputs, Off-take and Farm Management Services.
“Under FAM-SMART, these are not mere service providers that walk away
but Project Partners that bring in value and wait to see the outcome
before receiving their share of benefits at project end.
