. Limited access to credit slows productivity, raises food inflation fears
By Our Reporter
Nigeria’s drive towards food self-sufficiency is facing fresh setbacks as farmers struggle to adopt mechanised farming due to inadequate financing, forcing many to rely on outdated cultivation methods that limit productivity and increase production costs.
According to rice millers under the aegis of Rice Millers Association of Nigeria (RIMAN), the funding gap has significantly reduced paddy supply, leaving processing plants operating below installed capacity despite huge investments in milling infrastructure across the country.
Speaking on behalf of members of the association, RIMAN Chairman, Peter Dama, said many farmers and millers are unable to take advantage of the Federal Government’s agricultural mechanisation drive because they lack the financial capacity to purchase equipment.
Dama said although efforts to improve mechanisation were ongoing, the high cost of equipment and the prevailing economic situation had discouraged many operators from participating.
“The process is on, but people are not really going in there for it because the money is not there? People don’t have the money to really go buy all those things because things are very expensive”, he said.
He urged the government to focus on affordable mechanisation options that would benefit smallholder farmers, particularly irrigation equipment and small-scale tractors.
“We told them that the truth of this matter is that you can do mechanisation by supplying solar pumps for irrigation.
“You can also get small tiller tractors or tillers that you can use for farming. They use very little fuel to till your ground, to till your farm.
“Those are some of the things that people are going into, and you can see a lot of Chinese and Japanese people are bringing in those small tiller tools”.
Speaking on the state of the rice milling industry, Dama said large and medium-scale operators were facing significant challenges due to rising production costs, while smaller millers were coping better because of their relatively lower operating expenses.
“The industry is not doing very well, particularly when it comes to the very big and medium millers. The smaller millers are not that affected because their production cost is not as high. And you know what the electricity and energy situation in the country is. People resorts to expensive petrol and diesel because of power failures”.
He also expressed concern over the financial burden of implementing the new minimum wage, arguing that many businesses are struggling with rising operational costs.
“And then you begin to talk of N70,000 minimum wage. Farm workers are complaining. But where is the money? For example, you have 20 or 30 staff and you are paying N70,000, where will the money come from?”, he asked.
On access to tractors, Dama said financing remained a major obstacle for most farmers, adding that only wealthy farmers or cooperatives with members in the same location could realistically benefit from tractor acquisition schemes.
“The Bank of Industry (BOI) is the people I know who are in charge of anything tractor-related. And unless you are a bigger, richer farmer with access to funding, or farmers in one location coming together as cooperatives, it will be extremely difficult to adopt mechanised farming.
“But in a situation like the one we have in our association when a farmer is in Niger, one is in Enugu, another is in Calabar, and yet another in Kaduna, how can you come together as a cooperative association to pull money together? If I am in Niger, I will want the tractor to come and work for me after making my own contribution”.
He maintained that despite government efforts to promote mechanisation, inadequate financing continues to limit participation by farmers across the country.
“The tractorisation thing is a problem. People don’t have the money”, he said.
President Bola Tinubu had in June 2025 launched the Renewed Hope National Agricultural Mechanisation Programme, unveiling 2,000 tractors, 10 combine harvesters, 12 mobile workshops and more than 9,000 agricultural implements procured under a partnership with Belarus.
The government said the programme, to be implemented through a service-provider model, rather than direct ownership by farmers, is expected to support more than 550,000 farming households, cultivate over 500,000 hectares of farmland annually and boost food production nationwide.
While the tractors were unveiled in June 2025, their deployment did not commence immediately.
The Federal Government had handed over the implementation of the programme to the Bank of Agriculture.which said the delay was deliberate to establish a transparent and sustainable framework for allocation, maintenance and repayment, rather than distributing the equipment indiscriminately.
The bank subsequently opened applications, received more than 100,000 expressions of interest from mechanisation service providers and formally commenced distribution under the Renewed Hope National Agricultural Mechanisation Programme in February 2026.
Meanwhile, stakeholders have warned that unless affordable financing is made available to farmers to acquire tractors, harvesters and other modern equipment, the country will continue to grapple with low yields, rising food prices and increased dependence on imports.
They urged the Federal Government, commercial banks and development finance institutions to expand access to low-interest agricultural credit and accelerate mechanisation programmes to boost productivity and strengthen national food security.