Bank of Agriculture Launches N200 Billion Guaranteed Minimum Price Programme to Stabilise Food Prices and Protect Farmer Incomes
Initiative expected to reach over 500,000 farmers and impact 11.5 million households nationwide
The Bank of Agriculture (BOA) has launched a N200 billion Guaranteed Minimum Price (GMP) Programme designed to protect farmers from loss-making commodity prices while contributing to food price stabilisation across Nigeria.
The initiative, introduced under the National Commercial Food Reserve (NCFR) and the Renewed Hope Food Price Stabilisation Programme, is expected to provide greater income protection for grain farmers while strengthening Nigeria’s strategic food reserve.
The programme was unveiled in Abuja by the Managing Director/Chief Executive Officer of BOA, Mr. Ayo Sotinrin, alongside the Bank’s Executive Director, Operations and Technology, Mr. Tosin Salami, leadership of the All Farmers Association of Nigeria (AFAN), the Nigerian Commodity Exchange (NCX), and representatives of farming communities.
Protecting Farmers from Price Collapse
Speaking at the launch, Mr. Sotinrin explained that grain farmers experienced significant losses between 2024 and 2025 as market prices for major commodities, including maize, rice, sorghum and soybeans, fell below their cost of production.
He noted that the Federal Ministry of Agriculture and Food Security, the Bank’s supervising ministry, worked with BOA to develop the GMP Programme as a direct response to the challenges created by the sharp decline in commodity prices.
Under the programme, farmers who produced grain during the 2025 dry and wet seasons will receive a guaranteed floor price for their eligible produce, regardless of subsequent declines in open-market prices.
How the Guaranteed Minimum Price Programme Works
The programme is structured around a transparent aggregation and commodity warehousing system.
Once farmers’ produce is aggregated, the grain is delivered to warehouses managed by recognised commodity exchanges, including AFEX and NCX, with NCX serving as the lead partner.
The produce is then:
- Aggregated from participating farmers.
- Delivered to certified commodity warehouses.
- Graded and verified to establish quality and quantity.
- Recorded through a warehouse receipt issued to the farmer.
- Purchased under the Guaranteed Minimum Price mechanism, providing farmers with protection against prices falling below the established floor.
The model is intended to strengthen farmers’ bargaining position, improve transparency in commodity transactions and reduce the risk of farmers being forced to sell their produce at unsustainable prices immediately after harvest.
A Nationwide Programme for Farmers
BOA said the GMP Programme has been deliberately designed as an open and nationwide intervention, rather than a scheme limited to a select group of farmers.
The Bank is targeting the aggregation of at least 500,000 tonnes of grain during this phase. The scale of the programme is expected to benefit well over 500,000 farmers and impact an estimated 11.5 million households across the country.
The initiative is also expected to strengthen the connection between agricultural production, commodity markets and food security.
Building a Strategic Food Reserve
Beyond protecting farmer incomes, the programme is designed to contribute to Nigeria’s strategic food reserve.
The grain aggregated through the programme will be stored in commodity exchange warehouses and can be released into the market when there are significant increases in food prices.
During periods of sharp price increases, the stored commodities can be made available to the market at a subsidised price. This provides BOA with a mechanism to help moderate food price pressures while recovering value associated with its aggregation and storage operations.
The approach therefore creates a link between farmer income protection and consumer food price stability.
Farmers Welcome the Intervention
The National President of AFAN, Hon. Mohammed Magaji, described the Guaranteed Minimum Price Programme as a long-awaited intervention, noting that farmers had advocated for such a mechanism across successive administrations.
He said the programme would provide Nigerian farmers with greater confidence that they could receive fair and predictable value for their produce.
Strengthening Nigeria’s Commodity Market
The Managing Director of the Nigerian Commodity Exchange, Mr. Anthony Atuche, said the programme was designed as a market-driven and self-sustaining mechanism.
He explained that NCX’s warehousing and grading infrastructure would contribute to the development of a more standardised and transparent commodity market.
According to him, improved commodity grading, warehousing and market information would benefit both farmers and consumers by strengthening confidence in the agricultural value chain.
Supporting Food Security and Agricultural Growth
The Guaranteed Minimum Price Programme represents an important component of BOA’s broader role in supporting Nigeria’s agricultural sector.
By providing a price floor for eligible agricultural commodities, strengthening structured commodity aggregation and building strategic food reserves, the initiative seeks to address two critical challenges simultaneously: protecting farmers from damaging price volatility and improving the resilience of Nigeria’s food supply system.
Through the N200 billion programme, BOA is positioning structured agricultural finance and commodity market infrastructure as tools for strengthening farmer incomes, improving market stability and supporting national food security.
