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 Invited paper presented at the 6th African
Conference of Agricultural Economists,
September 23-26, 2019, Abuja, Nigeria

Copyright 2019 by [authors]. All rights reserved. Readers may make verbatim copies of this
document for non-commercial purposes by any means, provided that this copyright notice
appears on all such copies.
 Assessment of central bank of Nigeria’s anchor borrowers’ programme effects on rice
farmers in Kebbi state, Nigeria

*Umeh, J. C
Department of Agricultural Economics,
University of Agriculture,
P.M.B 2373,
Makurdi, Nigeria.
jceu1@yahoo.com

Adejo, M. A
Department of Agricultural Economics,
University of Agriculture,
P.M.B 2373,
Makurdi, Nigeria.
diggismiles@gmail.com

ABSTRACT
The study was designed to assess the effects of Central Bank of Nigeria’s Anchor Borrowers’
Programme (ABP) on rice farmers in Kebbi State, Nigeria. Primary and secondary data were
used. Primary data were collected through questionnaire from 226 rice farmers (113
beneficiaries and 113 non-beneficiaries of ABP), while the secondary data included annual
time series data on Nigeria’s rice import quantity and cost (1990-2016). Analytical tools
employed were descriptive and inferential statistics. The result showed fluctuations in trend of
Nigeria’s rice import quantity and cost. Beneficiaries were 17% more efficient with mean
technical efficiency of 0.98, compared to the non-beneficiaries with mean technical efficiency
of 0.81. This also translated to higher mean output (5504.4kg/ha) of beneficiaries, compared to
the mean output of 3267.7kg/ha of non-beneficiaries. Link established by ABP was favourable
in time and price for the beneficiaries. Other benefits derived by beneficiaries from ABP as
revealed by the study include, extension visits, trainings/seminars on farming, increase in
income, ready market for produce, employment creation, and improvement on standard of
living. Although, Anchor Borrowers’ Programme has positive effects on beneficiaries, its
effectiveness and efficiency can be improved through proper monitoring, timely and adequate
distribution of inputs.
Keywords : Effects, Anchor Borrowers’ Programme, Rice, Kebbi State.
INTRODUCTION
Agriculture contributes 40% of the Gross Domestic Product (GDP) and employs about
70% of the working population in Nigeria (CIA, 2013). Agriculture is also the largest economic
activity in the rural area where almost 50% of the population live. The state of agriculture in
Nigeria remains poor and largely underdeveloped. The sector continues to rely on
underdeveloped methods to sustain a growing population with little efforts to add value. This
has reflected negatively on the productivity of the sector, its contributions to economic growth
as well as its ability to perform its traditional role of food production among others. This state
of the sector has been blamed on heavy dependence on oil and its consequences on several
occasions (Falola and Haton, 2008).
In Nigeria the provision of institutional credit to small holder farmers has been the
policy thrust of successive governments. The first attempt at the injection of financial capital
into the agricultural subsector in Nigeria was made by the Federal Government in the 1962 –
1968 Development Plan with the provision of six million naira (N6m) for the development of
that sector of the economy (FMED, 1981). Following this, bank credits to the agricultural sector
in nominal terms over the years increased from N 230 million in 1978 to over N262 billion in
2005 (CBN, 2010a). This is in realization of the fact that to sufficiently boost food production
and adopt new agricultural technologies and innovations, there is the need for farmers to
borrow money from lending institutions (Obasi, Onyenweaku, and Njoku, 1995). Moved by
the desire to reduce import dependency, as well as by the need to relieve dependence on the oil
sector for economic growth, Federal and State governments stepped up efforts to promote
agricultural development through the establishment of a number of agricultural credit schemes.
These schemes include the Agricultural Credit Guarantee Scheme Fund (ACGSF) established
in 1978, the Supervised Agricultural Credit Scheme (SACS) established in 1979, the Special
Emergency Agricultural Loans Scheme (SEALS) established in 1984, the Agricultural Credit
Support Scheme (ACSS) established in 2006. During the era of Sanusi Lamido Sanusi as
Governor of the Central Bank of Nigeria, various schemes were also established, such as the
Commercial Agricultural Credit Scheme (CACS) established in 2009, the Small and Medium
Scale Enterprise Credit Guarantee Scheme (SMECGS) established in 2010, and the
establishment of the Nigerian Incentive based Risk Sharing system for Agricultural Lending
(NIRSAL) in 2010; though not a scheme as such, but it encourages farmers to insure their farms
against natural disaster, and to borrow from commercial banks guaranteeing the interest paid
by the farmer up to 60%.
The Anchor Borrowers’ Programme (ABP) was established in 2015 by the Central
Bank of Nigeria (CBN) in line with its developmental function. This was done in order to curb
the high cost been incurred by the government on the importation of food crops or agricultural
products that can be produced within the country. According to the CBN guide on the
programme (2015), Nigeria’s agricultural commodities and food import bill has averaged over
N1trillion in the past two years. Food products like milk, sugar, rice, wheat and fish accounted
for N901billion or 93.5% and N788billion or 88.71% of this total in 2013 and 2014,
respectively. These figures are exclusive of the activities of smugglers. The import bill of rice
and wheat was estimated at N428billion in 2013 and N307billion in 2014. These huge amounts
were expended on items that the country has the potential to produce locally with the attendant
loss of employment generation and wealth creation opportunities. Furthermore, the allocation
of foreign exchange to the importation of these items has continually depleted our foreign
reserve, which has been on a steady decline in recent times. The current effort of the CBN to
stimulate local production of the commodities is largely due to the adverse effect of their
importation to the nation’s foreign reserves. Under the intervention, the CBN has set aside the
sum of N20billion from the N220billion Micro, Small and Medium Enterprises Development
Fund (MSMEDF) for farmers at a single-digit interest rate of 9%. The programme seeks to
pursue objectives such as, creation of jobs, reduction in food imports and diversification of the
economy. The programme aims at creating linkages between over 600,000 smallholder farmers
(out-growers) and reputable large-scale processors (off-takers) with a view to increasing
agricultural output and significantly improving capacity utilization of integrated mills.It is in
further realisation of this, that a Memorandum of Understanding was signed between the Lagos
and Kebbi State governments on agricultural production, particularly rice production. This was
done to improve on the production and processing of rice in the country. This gave birth to
what is currently known as the “Lake Rice”. This also will harness the economies of scale of
Kebbi State in rice production and the readily-available market in Lagos State. The Anchor
Borrowers’ Programme was established with its pilot phase in Kebbi State. Rice production in
the State has been one of the major focuses of the pilot phase.
Nigeria is the largest producer of rice in West Africa but the second largest importer of
rice in the world, accounting for 25% of the continent’s import. Local production is done on
2.8million hectares of farmland (CBN, 2015). Nigeria produces 2.55million metric tonnes of
the estimated 6.1million metric tonnes it consumes annually. It is further projected that
Nigeria’s rice consumption will rise to 35million metric tonnes by 2050, increasing at the rate
of 7% per annum due to estimated population growth (CBN, 2015). Considering the rate at
which the country’s population increases, there is the need to match the population increase
with food production; hence increase in rice production is one way of realizing this dream.
According to Central Bank of Nigeria (2010), between 1978 and 1989 when the
government stipulated lending quotas for banks to agriculture, there has been consistent
increase in the lending portfolios of banks to the agricultural subsector. For instance, between
1996 and 2011, the amount of loan granted under the ACGSF increased from N225,502.50 to
N7,623,216.25 with the highest amount of N8,349,509.28 being disbursed in 2009 (CBN,
2010). However, experience gained from the implementation of these schemes show that
although they have succeeded in increasing the level of funding to the agricultural sector, the
impact has not been as significant as anticipated, and moreover, the successes recorded have
almost in all cases been constrained by among others, poor loan repayment performance, late
disbursement of loans, loan diversion, low output, low productivity, and reluctance on the part
of formal lending institutions to finance agricultural production (Njoku and Obasi, 1991).
Also the non-availability of favourable market for farmers’ products, which often
results in low price offered for the products, tends to discourage farmers from expanding
production. There has also been a failure in past credit schemes to link farmers and potential
buyers. As a result, there is the need therefore for research to evaluate the performance of any
further lending scheme established in Nigeria, with a view to deriving policy for better
performance.
The broad objective of this study was to assess the effects of Anchor Borrowers’
Programme on rice farmers in Kebbi State, Nigeria. The specific objectives were to:
i. analyse the trend of Nigeria’s rice import quantity and cost;
ii. ascertain the level of technical efficiency of beneficiaries and non-beneficiaries of ABP
in the State;
iii. assess the link between the rice farmer beneficiaries and processors and
iv. identify other benefits derived by the beneficiaries from the programme.
The following hypotheses were tested for this study:
H01: Credit offered by the Anchor Borrower’s Programme has no significant effect on the level
of output of beneficiaries in the study area.
H02: There is no significant difference in the output of the rice farmers between beneficiaries
and non-beneficiaries of ABP.

METHODOLOGY
The study was conducted in Kebbi State, in North-Western Nigeria. It is located between
latitudes 10°8′N and 13°15′N and longitudes 3°30′E and 6°2′E. Kebbi State occupies 36,800
square kilometres, and shares boundaries with Sokoto State on the North-Eastern axis, Zamfara
State on the Eastern part, Niger state on the Southern part and Republic of Niger on the Western
part (www.kebbistate.gov.ng). The estimated population of Kebbi State is about 4,401,423
people; projected to 2016 on a 3.15% annual growth rate from the population estimate of 2006
census by the National Population Commission (www.nigerianstat.gov.ng). Kebbi was formed
out of Sokoto State on August 27, 1991 by the regime of General Ibrahim Babangida. Its capital
is Birnin Kebbi. Kebbi State is divided into four emirate councils (Gwandu, Argungu, Yauri
and Zuru).
The population of this study consists of all rice farmers in Kebbi State. This included
both beneficiaries and non-beneficiaries of the Anchor Borrowers’ Programme. The sample
size selection was done using purposive and simple random sampling techniques. The four
emirate councils (Gwandu, Argungu, Yauri, and Zuru) in the State also serve as the agricultural
zones. Gwandu zone has 9 Local Government Areas, Argungu zone has 5 Local Government
Areas, Zuru zone has 4 Local Government Areas, while Yauri zone has 3 Local Government
Areas. In order to have a fair representation of each of the agricultural zones, two Local
Government Areas were purposively selected from Gwandu zone, while one Local
Government Area was selected from Argungu, Zuru, and Yauri zones respectively. The
selection of the Local Government Areas was done on the basis of high concentration of ABP
rice farmer beneficiaries in those areas. In Gwandu zone, Birnin Kebbi and Kalgo Local
Government Areas were selected. In Argungu zone, Argungu Local Government Area was
selected. In Yauri zone, Yauri Local Government Area was selected, while in Zuru zone, Zuru
Local Government Area was selected. The data on the sample frame of rice farmers in the State
were obtained from the Federal Ministry of Agriculture and Rural Development (FMARD),
Kebbi State. Using simple random sampling technique with a proportion allocation of 1 per
cent (0.01) across board, a total sample size of 226 respondents were selected from the Local
Government Areas. This included 113 beneficiaries of the ABP and 113 non-beneficiaries of
the programme.
Data for this study involved both primary and secondary sources. The primary data
were collected using well-structured questionnaire, while FAOSTAT was used to generate data
on Nigeria’s rice import quantity and cost (1990-2016). Analysis was done using both
descriptive and inferential statistics. The trend of Nigeria’s rice import quantity and cost, link
between farmers and processors, and other benefits derived by the farmers from the programme
were analysed using descriptive statistics such as Graphs, Frequencies and Percentages. The
Stochastic Frontier production function was used to analyse the level of technical efficiency of
the farmers. Correlation analysis was used to test hypothesis 1, and T-test was used to test
hypothesis 2.
For this study, the production technology of the farmers is assumed to be specified by
the Cobb-Douglas Frontier production function which is defined as follows:
For Beneficiaries;
LnYi = Lnβo + β1LnX1i + β2LnX2i + β3LnX3i + β4LnX4i+ β5LnX5i + Vi − Ui
Where,
Y = Output of Rice (Kg/ha)
X1 = Farm size (hectares)
X2 = Seed rate (kg/ha)
X3 = Labour (Mandays/ha)
X4 = Fertilizer rate (kg/ha)
X5 = Herbicides and Pesticides (litres/ha)
Vi = Random error that is assumed to be normally distributed with zero mean and constant
variance (σ2Vi).
Ui = Inefficiency effects independent of Vi, and half normal distribution with zero mean and
constant variance (σ2Ui).
The inefficiency effects, Ui is defined by:
Ui = δo + δ1Z1i + δ2Z2i + δ3Z3i + δ4Z4i + δ5Z5i + δ6Z6i + δ7Z7i
Where,
Z1 = Age of farmer (years)
Z2 = Level of education of farmer (years)
Z3 = Farming experience (years)
Z4 = Household size (No. of persons)
Z5 = Timeliness of access to the credit (Very timely = 1, Timely = 2, Fairly timely = 3, Not
timely = 4)
Z6 = Amount of output sold to the off-takers (kg)
Z7 = Adequacy of inputs received (Adequate = 1, Inadequate = 0)
Z8 = Difficulty in collection of Inputs (Difficult = 1, Not difficult = 0)
For Non-beneficiaries;
LnYi = Lnβo + β1LnX1i + β2LnX2i + β3LnX3i + β4LnX4i+ β5LnX5i + Vi − Ui
Where, Y = Output of Rice (Kg/ha)
X1 = Farm size (hectares)
X2 = Seed rate (kg/ha)
X3 = Labour (Mandays/ha)
X4 = Fertilizer rate (kg/ha)
X5 = Herbicides and Pesticides (litres/ha)
Vi = Random error that is assumed to be normally distributed with zero mean and constant
variance (σ2Vi).
Ui = Inefficiency effects independent of Vi ,and half normal distribution with zero mean and
constant variance (σ2Ui).
The inefficiency effects, Ui is defined by:
Ui = δo + δ1Z1i + δ2Z2i + δ3Z3i + δ4Z4i
Where
Z1 = Age of farmer (years)
Z2 = Level of education of farmer (years)
Z3 = Farming experience (years)
Z4 = Household size (No. of persons)
The βs and δs are scalar parameters that will be estimated. The variances of the random errors,
σ2v and that of the inefficiency effects σ2u and the overall variance of the model σ2 are related
thus: σ2 = σ2v+ σ2u and the ratio γ = σ2u ⁄ σ2, measures the frontier which can be attributed to
technical inefficiency (Battese and Corra, 1977). The estimates for all the parameters of the
Stochastic Frontier production function and the inefficiency model was simultaneously
obtained in a single stage maximum likelihood estimation procedure, using the computer
software frontier version4.1 (Coelli, 1996).

RESULTS AND DISCUSSION

Summary of Statistics for Rice Import Quantity and Cost in Nigeria (1990-2016)
The summary of statistics for Nigeria’s Rice import quantity and cost is presented in Table 1.
The result showed the mean of Rice import quantity to be 1.03million tonnes, and that of Import
cost to be US$429.2million. Rice import quantity and cost both had a positive skewness to the
right. Also, the probability of the Jarque-Bera test of normality indicates Rice import cost to be
significant at 1%, while Rice import quantity was not significant at any level. This implies that
Rice import cost is not normally distributed, while rice import quantity can be said to have a
normal distribution.

Table 1: Summary of Statistics for Nigeria’s Rice Import Quantity and Import Cost
(1990-2016)
Import Quantity (Tonnes) Import Cost (US$ ‘000)
Mean 1030875.0 429229.1
Median 970787.0 295585.0
Maximum 2455202.0 1573461.0
Minimum 90528.0 39787.0
Standard Deviation 675418.6 419343.4
Skewness 0.497 1.43
Kurtosis 2.204 4.071
Jarque-Bera 1.824 10.477
Probability 0.401 0.005*
(*) denote significance at 1%

Trend of Rice Import Quantity in Nigeria

The trend of Nigeria’s rice import quantity is presented in Figure 1. Rice import quantity
experienced movement between a range in minimum of 90,528tonnes and maximum of
2.46million tonnes. Between 1990 and 1995 there was a slightly stable movement in rice import
quantity, and then a sharp rise in 1996 to 1997. There was a rise and fall in the quantity of rice
import between 1997 and 2000, and a sharp increase from 2000 to 2001. From 2001 to 2009,
there were fluctuations in rice import quantity with increases and decreases, until a sharp
increase in 2009 to its peak in 2012. The quantity of rice import experienced a sharp fall in
2012 which also continued falling till 2016. The downward movement in rice import quantity
might be attributed to government policies desired to reduce the rate of rice importation in the
country, thereby encouraging local production. These policies range from the placement of ban,
and high tariffs on rice importation in the country to the establishment and initiation of schemes
like the Anchor Borrowers’ Programme.

IMP_QTY
2,500,000

2,000,000

1,500,000

1,000,000

500,000

0
90 92 94 96 98 00 02 04 06 08 10 12 14 16
Figure 1: Trend of Rice Import Quantity in Nigeria

Trend of Rice Import Cost in Nigeria

The trend of Nigeria’s rice import cost is presented in Figure 2. Rice import cost between the
periods of 1990-2016 ranged between a minimum of US$39.8million to a maximum of
US$1.59billion. Between 1990 and 1995, the value of Rice import maintained a slightly stable
movement, but started to increase from 1995 to 2006. There was a sharp increase from 2006 to
2008. Between 2008 and 2010 rice import cost experienced a slight fall and rise in movement,
and then a sharp increase in 2010 to its peak in 2013. In 2013, there was a sharp fall in the cost
of rice import, which continued to its minimum in 2016. The decrease in rice import cost can
be linked to the decrease in the quantity of import, which is associated to government desire to
reduce the high amount been incurred in rice importation in the country, through its policies.
 IMP_COST
1,600,000

1,400,000

1,200,000

1,000,000

800,000

600,000

400,000

200,000

0
90 92 94 96 98 00 02 04 06 08 10 12 14 16

Figure 2: Trend of Rice Import Cost in Nigeria

The Maximum Likelihood Estimates for the Parameters in the Stochastic Frontier
Production Function for Beneficiaries and Non-Beneficiaries of ABP
The result of the Stochastic Frontier production Function for the beneficiaries presented
in Table 2, shows that the estimated sigma squared (0.01) was significant at 1% level indicating
a good fit and the correctness of the specified distributional assumption of the composite error
term. Also, the result for the non-beneficiaries presented in Table 3, shows that the estimated
sigma squared (61749.88) was significant at 1% indicating a good fit and correctness of the
specified distributional assumption of the composite error term.
The coefficients (elasticities) of production factors for the beneficiaries of ABP are
presented in Table 2. The result showed that farm size had a positive coefficient (0.56) and was
significant at 1% level, fertilizer rate had a positive coefficient (0.02) and was significant at
1% level. This result indicates that an increase in farm size and fertilizer rate will lead to a
positive increase in output of the beneficiaries. This result agrees with the findings Tsue and
Akande (2010) who found positive relationship between farm size and output.
Table 3, shows the elasticities for the non-beneficiaries of ABP. Farm size had a
positive coefficient (2955.30) and was significant at 1% level, seed rate had a positive
coefficient (9.27) and was significant at 1% level, and labour had a positive coefficient (1.16)
and was significant at 5%. This indicates that an increase in the production inputs such as farm
size, seed rate and labour will increase the output of the non-beneficiaries. Also, herbicides and
pesticides had a negative coefficient (-42.90) and was significant at 1% level. This indicates
that an increase in the amount of herbicides and pesticides would negatively affect output,
therefore non-beneficiaries need to reduce the amount of herbicides and pesticides in order to
increase output.
The positive significance associated with the production factors such as land, fertilizer
rate confirms the importance of the ABP, as beneficiaries have access to inputs to enable them
expand production, since an increase in these variables tend to have a positive effect on the
level of output. The result of the t-test presented in Table 4 shows a significant difference in
the mean output of beneficiaries (5504.4kg/ha) and non-beneficiaries (3267.7kg/ha). The result
shows the t-value (-7.639) to be significant at 1% level of significance, therefore rejecting the
null hypothesis. This result indicates that, the beneficiaries had more output than the non-
beneficiaries. This implies that due to the credit given to the beneficiaries, they were able to
use more inputs resulting in higher productivity.
More so, the result of the correlation analysis of no significant relationship between
credit access and the level of output of rice farmers in the study area illuminates the importance
of ABP. The result presented in Table 5, shows that the correlation coefficient (0.562) is
significant at 1% level of significance; therefore the null hypothesis is rejected, implying that
credit access has a significant relationship with the level of output of rice farmers in the study
area. This result confirms the importance of credit in agriculture, since most rural farmers are
limited by inadequate finance to boost production. This also agrees with the findings of Ugoani,
Emenike, and Ben-Ikwunagum (2015), which reported that c redit facility creates the chances
to improve the threshold of productivity, revenue efficiency and improvement of the standard
of living. Therefore programmes like the Anchor Borrowers’ Programme should be encouraged
and developed to achieve food security in the country.

Inefficiency Stochastic Frontier Model of the Production Function

The result of the inefficiency model for the beneficiaries is presented in Table 2. Amount
of output sold to off-takers had a negative coefficient (-0.01) and was significant at 1% level,
while level of education had a negative coefficient (-0.02) and was significant at 5% level. This
indicates that an increase in the level of education and amount of output sold to off-takers
reduces technical inefficiency thereby increasing the technical efficiency of the beneficiaries.
The result of the inefficiency model for the non-beneficiaries is presented in Table 3.
Age of farmer (-2.84) was negative and significant at 1% level, indicating that an increase in
the age of non-beneficiaries negatively affect technical inefficiency. While, level of education
(4.04), farming experience (2.35), and household size (3.09) was positive and significant at 1%
level, indicating that an increase in these variables positively affect technical inefficiency.

Table 2: The Maximum Likelihood Estimates for the Parameters in the Stochastic
Frontier Production Function for the Beneficiaries of ABP
Variable Parameter Coefficients t-ratio
Production factor
Constant B0 7.22 7.68*
Farm size B1 0.56 9.29*
Seed rate B2 0.35 0.53
Labour B3 -0.12 -0.48
 Fertilizer rate B4 0.02 3.90*
Herbicides and Pesticides B5 0.09 0.30
Inefficiency Model
Constant δ0 0.01 0.01
Age of farmer δ1 -0.05 -0.39
Level of education δ2 -0.02 -2.29**
Farming experience δ3 0.02 0.46
Household size δ4 -0.03 -0.78
Timeliness of access to the credit δ5 0.03 0.90
Amount of output sold to the off-takers δ6 -0.01 -3.62*
Adequacy of inputs received δ7 -0.04 -0.35
Difficulty of collection of inputs δ8 0.00 0.00
Variance Parameter
Sigma squared σ2 0.01 7.59*
Gamma ϒ 0.02 0.58
Log likelihood function 93.17
* t-ratio significant at 1%, and **t-ratio significant at 5%

Table 3: The Maximum Likelihood Estimates for the Parameters in the Stochastic
Frontier Production Function for the Non-Beneficiaries of ABP
Variables Parameters Coefficient t-ratio
Production Factors

Constant B0 40.43 40.43*

Farm size B1 2955.30 2955.33*
Seed rate B2 9.27 9.43*
Labour B3 1.16 2.28**
Fertilizer rate B4 -0.41 -1.38
Herbicides and Pesticides B5 -42.90 -42.92*
Inefficiency Model
Constant δ0 -0.002 -17.96
Age of farmer δ1 -2.84 -5.34*
Level of education δ2 4.04 9.35*
Farming experience δ3 2.35 3.31*
Household size δ4 3.09 8.40*
Variance Parameter
Sigma squared σ2 61749.88 61749.88*
Gamma ϒ 0.0002 1.31
Log likelihood function -780.87
*t-ratio significant at 1%, and **t-ratio significant at 5%

Table 4: Test of Difference of Mean Output (Per Hectare) of Rice Farmer

Beneficiaries and Non-Beneficiaries of ABP
Variable Group Mean Standard t df Mean Sig(2-
Deviation Deviation tailed)
Output Non- 3267.7 1391.314 -7.639** 224 -2236.726 0.000
beneficiaries
 Beneficiaries 5504.4 2784.055
**t-value significant at 1% level

Table 5: Correlation Analysis of No Significant Relationship between Credit Access

and the Level of Output of Rice Farmers in the Study Area
Variable Correlation Coefficient Significance (2-tailed)
Access to Credit 0.562** 0.000
** Correlation is significant at 0.01 level.

Efficiency Estimate for the Stochastic Frontier Production Function for

Beneficiaries and Non-Beneficiaries of ABP.
The result for the distribution of the technical efficiency estimates of the beneficiaries
is presented in Table 6. The result shows that majority (71.7%) of the beneficiaries operated
within the technical efficiency of 0.95-1.00, while 23.9% of the beneficiaries operated within
the technical efficiency 0.90-0.95, and 4.4% operated within 0.87-0.90. The mean technical
efficiency of the beneficiaries was 0.98, while the minimum technical efficiency was 0.87, and
the maximum technical efficiency was 1.00. This implies a high level of the technical
efficiency amongst the beneficiaries of ABP in the study area.
Table 7shows the result of the distribution of the technical efficiency estimates for the
non-beneficiaries of the ABP in the study area. The result shows that majority (75.2%) of the
non-beneficiaries operated within the technical efficiency of 0.80-1.00, while 15.9% operated
within the technical efficiency of 0.10-0.40, and 8.8% operated within the technical efficiency
of 0.40-0.80. The mean technical efficiency of the non-beneficiaries in the study area was 0.81,
while the minimum technical efficiency was 0.10, and the maximum technical efficiency was
1.00.
From the above, the beneficiaries are 17% more technically efficient compared to the
non-beneficiaries. This can be attributed to the benefits derived from the Anchor Borrowers’
Programme by beneficiaries such as access to fund, inputs, and guaranteed market for the
output.

Table 6: Distribution of Technical Efficiency Estimates of Beneficiaries

Technical Efficiency Frequency Percentage
0.87-0.90 5 4.4
0.901-0.95 27 23.9
0.951-1.00 81 71.7
Total 113 100.0
 Mean Efficiency 0.98
Minimum efficiency 0.87
Maximum efficiency 1.00

Table 7: Distribution of Technical Efficiency Estimates of Non-Beneficiaries

Technical Efficiency Frequency Percentage
0.10-0.4 18 15.9
0.401-0.8 10 8.8
0.801-1.0 85 75.2
Total 113 100.0

Mean efficiency 0.81

Minimum efficiency 0.10
Maximum efficiency 1.00

The link between Rice Farmer Beneficiaries (Out-growers) and Processor (Off-takers)
The result for determining the link between the rice farmer beneficiaries (Out-growers)
and Off-takers is shown in Table 8. Majority (64.6%) of the farmers sold their produce to
millers/processors, while 14.2% sold to the government, 14.2% sold to consumers, and 7.1%
sold to retailers. This implies that the government and processors who serve as off-takers were
the outlets to whom majority of the farmers marketed their produce. The farmers that sold to
consumers and retailers did so in order to meet the demands of their already established
customers prior to the creation of the link between the out-growers and off-takers by the ABP.
This link created by the ABP to avoid postharvest losses and ensure adequate utilization of
local processing industries was effectively utilized by both the Out-growers and Off-takers.
Also, Table 8 shows the timeliness in which the farmers who sold their produce to the
Off-takers marketed them. Majority (60.2%) of the farmers agreed in selling their produce to
the Off-takers fast, 9.7% of the farmers agreed that the exchange was very fast, and 8.9% sold
their produce fairly fast. Their result indicates that there was no delay in marketing of produce
since arrangements were already in place to enable quick exchange.
Furthermore, the price offered by the Off-takers (Government and Processors) for the
produce of the farmers (Out-growers) is shown in Table 8. Majority (69.0%) of the farmers
consented to the price offered by the Off-takers as favourable, while 8.6% agreed to very
favourable price offered by the Off-takers, and 1.8% agreed to fairly favourable price offered
by the Off-takers. This implies that majority of the farmers who sold to the Off-takers were
given a favourable price for their produce. This therefore encouraged the farmers to produce
more as they were sure of getting favourable returns on investment.
The link created by the ABP, suggests the importance of infrastructure in agriculture
that is in pre, production, and post-production phases. Farmers do not only lack inputs for
production, but also suffer from post-harvest losses due to inadequate storage facilities, and
unavailability of favourable market for produce. The establishment of the link between out-
growers and off-takers is a drive towards curbing post-harvest losses by farmers, as their
produce can be exchanged favourably in time and price. Furthermore, the creation of this link,
has led to the Memorandum of Understanding signed by both the Lagos and Kebbi State
governments to increase rice production, by taking advantage of vast arable land in Kebbi State,
enhance the effective and efficient utilization of the local/indigenous processing industries, and
also take advantage of the large market in Lagos State and subsequently the nation at large.
This gave birth to the processed rice already bagged and selling as ‘Lake Rice’. This also shows
the significance of infrastructure in agriculture as value addition through processing of produce
is a vital part of the production process. It also helps to reduce post-harvest losses as the shelf
life of any produce is increased when processed.

Table 8: Distribution of the Link between Rice Farmer Beneficiaries (Out-Growers)

and Off-takers (Government/ Processors)
Variables Frequency Percentage
Buyers of Produce
Government 16 14.2
Millers/Processors 73 64.6
Retailers 8 7.1
Consumers 16 14.2
Total 113 10.0.0
Timeliness of Exchange
Very Fast (< 1month) 11 9.7
Fast (1-3months) 68 60.2
Fairly Fast (3-5months) 10 8.9
No Response 24 21.2
Total 113 100.0
Favourability of Price Offered
Very Favourable 9 8.0
Favourable 78 69.0
Fairly Favourable 2 1.8
No Response 24 21.2
Total 113 100.0

Other Benefits Derived by the Beneficiaries from the Programme

The result in Table 9 presents the other benefits derived by the rice Farmer beneficiaries
from the ABP. These include, trainings / seminar on farming (74.3%), ready and available
market for produce (53.1%), Extension visits (46.9%), improvement on the standard of living
(19.5%), employment creation (17.7%), and increase in income (12.4%). This shows that the
Anchor Borrowers’ Programme not only provides credit for farmers, but also educates farmers
on improved cultural practices through training and extension visits. The training for the
farmers is done once before the commencement of the production cycle. The training is
basically on pre-production, production, and post-production agricultural practices. Also, the
farmers are reminded of these practices during extension visits. Averagely, each farmer is
visited at least once in a month during the production period. This helps to monitor the farmers
and keep them abreast with new technologies in farming. Furthermore by providing the
necessary requirements to enable the farmers expand production, farmers are encouraged to
produce more, thereby increasing their income and in the long run improving their standard of
living. This is in line with the study conducted by Amalu (1998), who opined that most
agricultural policies and programmes emphasize almost same objectives like; to provide food
for the inhabitants of the nation (food security and sufficiency) and export excess to other
countries and to provide rural dwellers and farmers with extension services, agricultural
support and rural development services etc.
TABLE 9: Distribution of other Benefits derived by the Beneficiaries from the
Programme
Benefits *Frequency *Percentage
Extension Visit 53 46.9
Training / Seminar on farming 84 74.3
Increase in Income 14 12.4
Ready Market for Produce 60 53.1
Employment Creation 20 17.7
Improvement on the standard of
living 22 19.5

Total 113 100.0

*Multiple Responses

CONCLUSION AND RECOMMENDATIONS

Beneficiaries of the ABP operated on a higher level of technical efficiency compared
to their non-beneficiary counterparts. Credit access had significant relationship with the level
of output of the rice farmers in the study area. There was a significant difference between the
output of beneficiaries and non-beneficiaries of ABP, as the output of beneficiaries was greater
than the output of non-beneficiaries.
The link between the out-growers and off-takers existed and was adequately utilized by
majority of the beneficiaries. Also exchange that occurred within this link was timely and
financially favourable for the beneficiaries. Other benefits derived by the beneficiaries from
the programme include trainings/seminars on farming, extension visits, ready market for
produce, employment creation, improvement on the standard of living, and increase in income.
Anchor Borrowers’ Programme has positive effects on the rice farmers in the State, as
beneficiaries have been shown to possess characteristics such as increased output and high
technical efficiency level. This translates to increased income and improvement on the standard
of living for the farmer, and achievement of food security of the nation in the long-run.
Based on the findings of this study, the following recommendations are hereby made.
i. Amount of input offered by the programme should be increased and timely distributed
to enable maximum utilization of resources.
ii. The programme should be adequately monitored at both administrative and farmers
levels to curb any inappropriate behaviour and therefore, ensure the programme’s
effectiveness and efficiency.
iii. Government should encourage the spread of the programme to other States of the
country, so as to allow farmers across the nation take advantage of the opportunities
ABP avails, thereby boosting the agricultural subsector, and in the long-run ensures
food security for the nation.
iv. Government should encourage the continuity of the programme so that its aim towards
achieving food security of the nation will be attained. Therefore, future governments
should focus on how to develop the programme to maximise its capacity.
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