14/12/2011 (Vanguard) - President Goodluck Jonathan, yesterday, announced a budget allocation of N78.98 billion for the Ministry of Agriculture & Rural Development for the 2012 fiscal year.

Jonathan, who unveiled the allocation to the sector while presenting the 2012 budget to the joint session of the National Assembly, reiterated the commitment of his administration to modernise the agricultural sector of the economy.

He said: “The agricultural sector is being totally transformed to enable us move from traditional farming to modern agriculture as a business for our small and large-scale farmers.

“Our objective is to ensure food security whilst also promoting exports in agriculture-value chains where we have comparative advantage. We intend to process and add value to different crops such as rice, cassava, sorghum, oil palm, cocoa, cotton, etc.

“The Federal Ministry of Finance has put in place a mechanism to share risks with the banking sector by guaranteeing 70 per cent of the principal of all loans made for supply of seeds and fertiliser by the private sector this season.

“In addition, to getting input to farmers at an affordable cost, we are subsidising the interest rate on these loans to bring it down from 15 per cent to 7 per cent per annum. The Minister of Agriculture and the Central Bank are collaborating to extend these services for credit availability for the medium term.

“We are introducing further fiscal policy measures to support the development of the agricultural sector. In this respect, the duty on machinery and certain specified equipment for the sector will, effective January 31, 2012, attract zero duty.

“We will further look at supportive fiscal policies for the rice and wheat sectors to stimulate domestic production.

“Government is also introducing policies to encourage the substitution of high quality cassava flour for wheat flour in bread-baking. Bakeries will have 18 months in which to make the transition and will enjoy a corporate tax incentive of 12 per cent rebate if they attain 40 per cent blending.

Ban on cassava flour importation

“With effect from March 31, 2012, importation of cassava flour will be prohibited so as to further support this programme.

“All equipment for processing of high quality cassava flour and composite flour blending will enjoy a duty-free regime as incentive to bakers for composite flour utilisation.

“Consultations with the sector to ensure a smooth transition are on-going.”