Nigeria sets price floor for two million farmers in new scheme
Nigeria's Bank of Agriculture is rolling out a state-backed financing and guaranteed minimum price scheme for two million farmers, a mechanism designed to reduce food import costs and stabilize domestic agricultural supply chains.
The Bank of Agriculture (BOA) has launched a state-backed agricultural financing programme that will provide two million Nigerian smallholder farmers with structured credit. The initiative also introduces a guaranteed minimum price for crops, marking a shift in how the country underwrites agricultural risk.
Implemented alongside the Federal Ministry of Agriculture and Food Security and private aggregator Arzikin Noma Africa, the scheme aims to overhaul food production financing. Rather than offering standalone loans, it integrates credit with input distribution, weather advisories, and a guaranteed offtake mechanism.
Under the model, farmers receive supplies from aggregation companies that later purchase the harvest at a government-approved floor price. “Under the model, every participating farmer is linked to a Farmer Aggregation Company that provides inputs and extension support throughout the production cycle before purchasing harvested produce at a government-approved minimum price,” said Abubakar Kyari, Minister of Agriculture and Food Security. “This ensures farmers have a guaranteed market, protects them from exploitative pricing and encourages greater investment in agricultural production.”
The scale of the supply chain intervention is substantial. BOA Managing Director Ayo Sotinrin said the programme will distribute more than 10 million bags of fertiliser and improved seeds. Nearly 300,000 farmers are already onboarded, with over 1.1 million bags of fertiliser and 16,470 metric tonnes of seeds moving through 20 aggregation companies across more than 20 states.
For investors and economists, the programme represents a direct attempt by the Tinubu administration to curb Nigeria's reliance on food imports, a persistent drain on foreign exchange reserves. Hakeem Adekunle Osho, BOA's Divisional Head of Finance and Strategy, said the intervention targets food sufficiency, reduced import dependence, and the generation of foreign exchange through agricultural exports.
Smallholders currently produce about 85 per cent of Nigeria's food but have historically absorbed market volatility alone. By introducing a guaranteed minimum price and a revolving credit model—where loans are repaid post-harvest to fund subsequent seasons—the state is transferring pricing risk to institutional aggregators. “Sustainable agricultural transformation can only be achieved when every component of the value chain, from production and processing to financing and market access, works together to create an enabling environment for farmers to thrive,” Sotinrin said.
