FAQ - Frequently Asked Questions

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International Cooperative Alliance (ICA) defines Cooperative as:-
“A co-operative is an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise.”

The Cooperative principles are:

  1. Voluntary and Open Membership
    Co-operatives are voluntary organizations, open to all persons able to use their services and willing to accept the responsibilities of membership, without gender, social, racial, political or religious discrimination.
  2. Democratic Member Control
    Co-operatives are democratic organizations controlled by their members, who actively participate in setting their policies and making decisions. Men and women serving as elected representatives are accountable to the membership. In primary co-operatives members have equal voting rights (one member, one vote) and co-operatives at other levels are also organized in a democratic manner.
  3. Member Economic Participation
    Members contribute equitably to, and democratically control, the capital of their co-operative. At least part of that capital is usually the common property of the co-operative. Members usually receive limited compensation, if any, on capital subscribed as a condition of membership. Members allocate surpluses for any or all of the following purposes: developing their co-operative, possibly by setting up reserves, part of which at least would be indivisible; benefiting members in proportion to their transactions with the co-operative; and supporting other activities approved by the membership.
  4. Autonomy and Independence
    Co-operatives are autonomous, self-help organizations controlled by their members. If they enter into agreements with other organizations, including governments, or raise capital from external sources, they do so on terms that ensure democratic control by their members and maintain their co-operative autonomy.
  5. Education, Training and Information
    Co-operatives provide education and training for their members, elected representatives, managers, and employees so they can contribute effectively to the development of their co-operatives. They inform the general public – particularly young people and opinion leaders – about the nature and benefits of co-operation.
  6. Cooperation among Cooperatives
    Co-operatives serve their members most effectively and strengthen the co-operative movement by working together through local, national, regional and international structures.

7. Concern for community
Co-operatives work for the sustainable development of their communities through policies approved by their members.

The membership of SEIFAC is open to the following categories:

  1. Individual Smallholder Farmers
  2. Agricultural Producer Cooperative Societies
  3. Primary Agricultural Cooperative Societies;
  4. Community Development Associations
  5. Federal, State and Local Governments, to the extent that the Board/General Body of SEIFAC require and request;
  6. Public Financing Institutions to the extent required/requested by the Board/ General Body of SEIFAC;
  7. Any cooperative society activities of which are augmentative to the activities and conducive to the overall growth of SEIFAC
  8. Associate Member: SEIFAC has provision of Associate Members in its Bye-Laws. Any such person/society/Institution with whom SEIFAC is likely to do business in connection with services/products/inputs may be admitted as associate member.

Who are willing to venture into the SEIFAC following 9 enterprises: Rice, Maize, Sesame, Cassava, Yam, Groundnuts, Bambaranuts, Sorghum and Soybean.

  1. Supply of agro-inputs to member cooperatives on priority basis.
  2. Provision of advisory and extension support
  3. Credit facilities without collaterals
  4. Agric loans at single digit interest rate
  5. Market linkage
  6. Farm enterprise Insurance policy
  7. Payment of SEIFAC to members/societies dividend on the equity held by them in SEIFAC
  8. The member society can send their representative for the Representative General Body of SEIFAC as per SEIFAC Bye-Laws.

If elected as delegate of SEIFAC, S/he has –

Opportunity to participate and vote in the Annual General Meeting of SEIFAC.

Opportunity to participate in the election of Board of Directors of SEIFAC.

Opportunity to participate in Agro-PC/RTC Visit Programme.

Opportunity to participate in Inter- State Visit and Visit to Research Institutes and Agri-Universities.

Opportunity to participate in State/Zonal Advisory Committee meetings, local extension programmes etc. arranged by SEIFAC.

An Agricultural Production Cluster (Agro-PC) is a legal entity formed by primary producers, and farmer. An Agro-PC can be a producer company, a cooperative society or any other legal form which provides for sharing of profits/benefits among the members. In some forms like producer companies, institutions of primary producers can also become member of Agro-PC.

The main aim of an Agro-PC is to ensure better income for the producers through an organization of their own. Smallholder Farmers do not have the volume individually (both inputs and produce) to get the benefit of economies of scale. Besides, in agricultural marketing, there is a long chain of intermediaries who very often work non-transparently leading to the situation where the producer receives only a small part of the value that the ultimate consumer pays. Through aggregation, the primary producers can avail the benefit of economies of scale. They will also have better bargaining power vis-à-vis the bulk buyers of produce and bulk suppliers of inputs.

It is one type of cluster farming where the members are farmers. Smallholder Economic Interest Farmers Agricultural Cooperative (SEIFAC) is providing support for promotion of Agro-PCs. Agro-PC is a generic name for an organization of producers of any produce, e.g., agricultural, non-farm products, artisan products, etc.

Yes. The Agro-PC is an organization of the primary producers. If the produce in question is a non-farm item (for example, handloom or handicraft), then the Agro-PC will be that of non-farmers. BUT for SEIFAC at the moment there is no such provision by its mandate. The objective of the Agro-PC is to ensure better income realization to its members (who are producers) through aggregation and, if feasible, value addition.

  1. It is formed by a group of producers for either farm.
  2. It is a registered body and a legal entity.
  3. Producers are shareholders in the organization.
  4. It deals with business activities related to the primary produce/product.
  5. It works for the benefit of the member producers.
  6. A part of the profit is shared amongst the producers.
  7. Rest of the surplus is added to its owned funds for business expansion.

The ownership of the Agro-PC is with its members. It is an organization of the Smallholder Farmers, by the Smallholder Farmers and for the Smallholder Farmers. One or more institutions and/or individuals may have promoted the AGRO-PC by way of assisting in mobilization, registration, business planning and operations. However, ownership control is always with members and management is through the representatives of the members.

Any individual or institution can promote an Agro-PC. Individual persons or institutions may promote Agro-PC using their own resources out of goodwill or with the noble objective of socioeconomic development of producers. If, however, the facilitating agency wishes to seek financial and other support, then they have to meet the requirements of the donor/financing agency.

Government, SEIFAC, Government Departments, Corporates and Domestic & International Aid Agencies provide financial and/or technical support to the Agricultural Production Cluster Promoting Institution (APCPI) for promotion and hand-holding of the Agro-PC. Each agency has its own criteria for selecting the project/promoting institution to support.

Yes, it can. The NGO may be a non-profit organization, but not the Agro-PC. The NGO can promote Agro-PC which will provide better income to the members. Sharing of profit among members is an important objective of the Agro-PC.

Institutions registered as cooperative societies and producer companies have legal provisions for sharing of profit earned by the Agro-PC by way of dividend. Other legal forms do not explicitly provide for profit sharing. However, the Agro-PC can offer better price for the produce it procures from the members, thus, benefiting the latter. Similarly, it can procure inputs/raw material in bulk and sell to members with low margin. Such activities are permissible for Agro-PCs under all legal forms.

The primary producers have skill and expertise in producing. However, they generally need support for marketing of what they produce. The Agro-PC will basically bridge this gap. The Agro-PC will take over the responsibility of any one or more activities in the value chain of the produce right from procurement of raw material to delivery of the final product at the ultimate consumers’ doorstep. In brief, the Agro-PC could undertake the following activities:

  1. Procurement of inputs
  2. Disseminating market information
  3. Dissemination of technology and innovations
  4. Facilitating finance for inputs
  5. Aggregation and storage of produce
  6. Primary processing like drying, cleaning and grading
  7. Brand building, Packaging, Labeling and Standardization
  8. Quality control
  9. Marketing to institutional buyers
  10. Participation in commodity exchanges

k. Export

An Agro-PC will support the members in getting more income by undertaking the activities of the Agro-PC by aggregating the demand for inputs, the Agro-PC can buy in bulk, thus procuring at cheaper price compared to individual purchase. Besides, by transporting in bulk, cost of transportation is reduced. Thus, reducing the overall cost of production. Similarly, the Agro-PC may aggregate the produce of all members and market in bulk, thus, fetching better price per unit of produce. The Agro-PC can also provide market information to the producers to enable them hold on to their produce till the market price become favourable. All these interventions will result in more income to the Smallholder Farmers.

An AGRO-PC is a collective of farmers (and non-farmers) who are the primary producers of a product (an agricultural produce or a manufactured product). It, therefore, can work as a platform to facilitate better access to government services. It can liaison with the Government Departments for convergence of programmes, like drinking water, sanitation, health and hygiene.

Agro-PC is an organization of the producers, specifically the primary producers. All primary producers residing in the relevant geography, and producing the same or similar produce, for which the Agro-PC has been formed, can become member of the Agro-PC. Membership is voluntary.

Yes. But sometimes by invitation as well. Agro-PC membership depends on the bye-laws of the Agro-PC. The founder-members are those who were there at the time of formation of the Agro-PC. Other members join the Agro-PC later. However, all members enjoy equal rights. A Smallholder Farmer or cooperative can become member(s) of an Agro-PC by submitting an application and a nominal membership fee. Some Agro-PCs also charge annual membership renewal fee. Although primary producers obtain membership of Agro-PC voluntarily. SEIFAC does all it can to bring all producers into the Agro-PC, especially the small producer cooperatives.

Any person engaged in any activity connected with or related to any primary produce producing on a piece of land between 0.5ha – 5has is regarded as a Smallholder Farmer.

Primary produce means the produce of farmers from agriculture and allied activities or produce of persons engaged in handloom, handicrafts and other cottage industries, including any by-product and product resulting from ancillary activities thereof. Primary produce also includes any activity intended to increase the production or quality of aforementioned products or activities. Persons engaged in agriculture, horticulture, animal husbandry, fishery, sericulture, apiary, handloom, handicrafts, etc., can become members of appropriate Agro-PCs.

One Smallholder Farmer cannot become the member of any t Agro-PC wo Agro-PCs operating either within the same location or producing the same primary product. BVN is the basis for registration and as there is no way out to use the same BVN twice for different persons on the SEIFAC database that is prohibited by the terms and conditions of SEIFAC.

Each Agro-PC will have an elected Board of Management / Board of Directors as per the bye-laws. The Board can engage professionals to manage its affairs. In the initial years, professional and managerial assistance is usually extended by SEIFAC/APCPI. As the leaders of the Agro-PC gain experience, they should take over the affairs of the Agro-PC completely.

All legal forms provide for engaging professional and other employees by the Agro-PC. Such persons should be paid out of the income of the Agro-PC. As far as possible, the income should come from value addition to the produce and not from price paid to members. If members get price less than the market, they will gradually move away from the Agro-PC. The professionals and other employees should be paid at par with the prevailing market to ensure that they remain for long with the Agro-PC. Compensation will also depend upon the business plan, ensuring a positive surplus.

The objective of the Agro-PC is to ensure better income to the member-producers through aggregation and value addition. Therefore, procurement from non-members is usually not undertaken. However, market exigencies at times may necessitate such procurement. There should be provision in the by-laws of an Agro-PC to enable procurement from non-members during such exigencies.

The core object of an Agro-PC is for the collective benefit of the member Smallholder Farmers, there should be provision in the bye-laws of the Agro-PC to help sell members personal produce to boost not just such member(s) income but also the overall yield of such Agro-PC.

Yes, it can. The Agro-PC can aggregate its produce, and sell it using the commodity exchanges. The produce needs to meet the quality standards specified by the commodity exchanges and be stored scientifically in approved warehouses. The Agro-PC can become a member of the Commodity Exchanges to do trading directly, or else it can sell through the exchange-approved brokers.

Yes, it can. For exporting agricultural produce, the Agro-PC will have to follow Good

Agricultural Practices (GAP). There are also other specific quality parameters that the importing countries impose for different produce which need to be complied with.

Expenditure towards registration fee, stamp duty, preparation of documents and facilitation charges etc., will depend on the legal structure of the AGRO-PC. In general, establishment of a producer company is more expensive than other legal forms. The estimated cost of incorporating a producer company is given below:

The critical areas to be covered under training /capacity building of Board of Directors of an Agro-PC and staff of an Agro-PC are as follows:

  1. Vision and Mission: The vision and mission of the Agro-PC is very important for the Board Directors as well as other staff. Creating value to the members by solving existing problems in the value chain, marketing and reasonable share of price realization in the rupee spent by the consumer on the members’ produce, should be the focus. All other activities / services should be to engage the members comprehensively throughout the year and to reduce their expenditures and increase their welfare.
  2. Good Governance: Governance which is responsible, transparent and keeping the interest of the members of the Agro-PC above all the considerations is a must for the success of an Agro-PC. Various aspects of good governance to be covered.
  3. Sustainability: Another most important aspect to be covered in the training is that the Agro-PC should not venture into unsustainable ventures which may create short term profits and harm the long-term interests/welfare of the community.
  4. Networking: The success of an Agro-PC depends on the networking and continuous interactions with various stakeholders. The BODs and staff should have the understanding and importance of networking to obtain maximum benefits to their members under convergence mode.
  5. Social Capital: The training should concentrate on making the Agro-PC relevant to the members at all times, which creates social capital and trust.
  6. Statutory Requirements: The BoD and staff should have an understanding of the constitution of the Agro-PC, statutory provisions under which it is formed, various other requirements under the statute and compliance thereof.
  7. Business Planning: The training covers aspects of business planning to maximize benefits as well as to reduce the business risks. The aspects like SWOT analysis, Balance Sheet Analysis, simple financial ratios for profitability, ratios that are seen by banks for financing, need to be covered.
  8. Financial Management: The training also should cover management of the finances like maintenance of books of account, Management Information System, share capital, borrowings, savings, loans, cash flow, funds flow, receivables management, payables management, investments etc.
  9. Monitoring: The BOD module should have various aspects of monitoring to ensure

that the business goals are achieved and the business is carried out in a professional manner.

Mainly three types of supports are available to the Agro-PCs from the Smallholder Economic Interest Farmers Agricultural Cooperative (SEIFAC).

  1. SEIFAC coordinates the formation of Agro-PC under her watch and lead them through to access support from the Federal Government of Nigeria CBN Anchor Borrowers Programme at single digit interest rate without collateral and facilitate the payback from proceeds from the Agro-PC produce sales.
  2. SEIFAC operates a Credit Guarantee Fund to mitigate credit risks of financial institutions

which lend to the Agro-PC without collateral. This helps the Agro-PCs to access credit from mainstream financial institutions for establishing and operating businesses.

c. SEIFAC provides matching equity grant up to NGN10m at 9.9% per annum to the Agro-PCs to enhance their borrowing power, and thus enables the entities to access bank finance.

The Central Bank of Nigeria (CBN) in line with its developmental function established the Anchor Borrowers’ Programme (ABP). The programme thrust of the ABP is provision of farm inputs in kind and cash (for farm labour) to Smallholder Farmers to address the country’s negative balance of payments on food. The loan is targeted at Smallholder Farmers engaged in the production of identified commodities across the country. The Farmers are to be in organized into groups/cooperative(s) of between 5 and 20 for ease of administration.

SEIFAC is generally mandated to provide the following facilities to her members:

  1. Input facilities in form of cash or kind component to members
  2. Agriculture implements on hiring basis
  • Storage facilities
  1. Primary and secondary processing facilities

SEIFAC is to playing an important role in providing these facilities to the farmers. In order to enable RTCs to provide more services to its members and generate income, an initiative is underway to develop Rural Transformation Centres (RTCs) in strategic locations with higher concentration of Agro-PCs to serve as multi service centres to assist Smallholder Farmers in marketing of their produce. Following facilities are to be taken up by SEIFAC channeled through her RTCs to the Smallholder Farmers/Agro-PCs:

  1. a) Agro-Storage centre:
  2. Construction of storage facilities along with sorting/grading unit as per Negotiable Warehouse Receipt System. This will enable SEIFAC to issue warehouse receipts. Based on these receipts, the farmers can get loan against the crop stored and can cultivate the next crop. Thus, the farmers will be facilitated to get better price by holding the crops without affecting the fund flow position.
  3. b) Agro-service Centre:
  4. Purchase of hi-tech agri-implements like tractors, power tillers, land levellers, rotary slasher, movers, seed driller, multi crop planters, paddy transplanters, sprayers, combine harvesters etc. depending upon the requirements of members. The earning will be from the rental of these equipment.
  5. c) Agro-processing Centre:
  6. Primary Processing: Sorting, grading unit, waxing/polishing unit etc.
  7. Secondary Processing: Value addition to produce.
  8. d) Agri -information Centre:
  9. Testing lab for soil & water, creating panel of experts for providing services on payment basis, knowledge dissemination centre, arrange training to farmers. The testing lab & expert guidance will be available to farmers at a cost.
  10. e) Agri Transportation & Marketing Facilities:

a. Procurement of produce, direct market linkage after aggregation and/ or processing, setting up of rural mart etc. The PACS, which are either in the area of marketing or intend to undertake this activity, may create this channel to facilitate the farmers in marketing.

SEIFAC is generally mandated to provide the following facilities to her members:

  1. Input facilities in form of cash or kind component to members
  2. Agriculture implements on hiring basis
  • Storage facilities
  1. Primary and secondary processing facilities

SEIFAC is to playing an important role in providing these facilities to the farmers. In order to enable RTCs to provide more services to its members and generate income, an initiative is underway to develop Rural Transformation Centres (RTCs) in strategic locations with higher concentration of Agro-PCs to serve as multi service centres to assist Smallholder Farmers in marketing of their produce. Following facilities are to be taken up by SEIFAC channeled through her RTCs to the Smallholder Farmers/Agro-PCs:

  1. a) Agro-Storage centre:
  2. Construction of storage facilities along with sorting/grading unit as per Negotiable Warehouse Receipt System. This will enable SEIFAC to issue warehouse receipts. Based on these receipts, the farmers can get loan against the crop stored and can cultivate the next crop. Thus, the farmers will be facilitated to get better price by holding the crops without affecting the fund flow position.
  3. b) Agro-service Centre:
  4. Purchase of hi-tech agri-implements like tractors, power tillers, land levellers, rotary slasher, movers, seed driller, multi crop planters, paddy transplanters, sprayers, combine harvesters etc. depending upon the requirements of members. The earning will be from the rental of these equipment.
  5. c) Agro-processing Centre:
  6. Primary Processing: Sorting, grading unit, waxing/polishing unit etc.
  7. Secondary Processing: Value addition to produce.
  8. d) Agri -information Centre:
  9. Testing lab for soil & water, creating panel of experts for providing services on payment basis, knowledge dissemination centre, arrange training to farmers. The testing lab & expert guidance will be available to farmers at a cost.
  10. e) Agri Transportation & Marketing Facilities:

a. Procurement of produce, direct market linkage after aggregation and/ or processing, setting up of rural mart etc. The PACS, which are either in the area of marketing or intend to undertake this activity, may create this channel to facilitate the farmers in marketing.

The Central Bank of Nigeria (CBN) in line with its developmental function established the Anchor Borrowers’ Program (ABP). The Program which was launched by President Muhammadu Buhari (GCFR) on November 17, 2015 is intended to create a linkage between anchor companies involved in the processing and Small Holder Farmers (SHFs) of the required key agricultural commodities. The program thrust of the ABP is provision of farm inputs in kind and cash (for farm labor) to small holder farmers to boost production of these commodities, stabilize inputs supply to agro-processors and address the country’s negative balance of payments on food. At harvest, the SHF supplies his/her produce to the Agro-processor (Anchor) who pays the cash equivalent to the farmer’s account.

The loan shall be targeted at smallholder farmers engaged in the production of identified commodities across the country. The Farmers should be in groups/cooperative(s) of between 5 and 20 for ease of administration.

The targeted commodities of comparative advantage to the State shall include but not limited to:

A. Cereals (Rice, Maize, wheat etc.) B. Cotton C. Roots and Tubers (Cassava, Potatoes, Yam, Ginger etc.) D. Sugarcane E. Tree crops (Oil palm, Cocoa, Rubber etc.) F. Legumes (Soybean, Sesame seed, Cowpea etc.) G. Tomato H. Livestock (Fish, Poultry, Ruminants etc.) Any other commodity that will be introduced by the CBN from time to time.

In 2017, CBN expanded the Anchor Borrowers’ Program (ABP) to include Agricultural Commodity Associations of the targeted Produce in an effort to expand the implementation of the ABP. This decision was taken to further ramp up domestic production of identified commodities by leveraging the existing organized structures of the agricultural associations nationwide, thereby providing huge economics of scale in the implementation of APB.

In simple terms, SEIFAC will be leveraging her size and existing structures to help enroll registered members and co-opt other Smallholder Farmers into her folks to benefit from the SEIFAC/CBN ABP.

The CBN, through commercial banks will provide financial support to registered members of SEIFAC who maintain accounts with SEIFAC Official Bankers. This support will cover the costs of farming between one (1) to five (5) Hectares under the supervision of SEIFAC.

This means that the ABP granted to SEIFAC Members is to empower them invest in the on SEIFAC coming cropping season. Qualified members will have Hectare(s) of Land farmed in Agricultural Production Cluster (Agro-PC) the SEIFAC cluster farming model in their name under the management of the SEIFAC and Agro-PC officials.

No! SEIFAC is undertaking to provide SEIFAC security for members who qualify for the Programme. SEIFAC Lands will be used as collateral for accessing the Funds by Qualified members.

Qualified members for the ABP can subscribe for the following crops:

1). Rice, 2). Yam, 3). Maize, 4). Sesame, 5). Cassava, 6). Soybean, 7). Sorghum, 8). Groundnut, 9). Bambaranut.

The CBN will provide this support to qualified members directly to their SEIFAC Project Operational Accounts. However, qualified beneficiaries will not be able to access this fund for anything less than what it was intended for, that is, subscribing with the SEIFAC for specific crop and Hectare(s) which the funds provides for.

  1. Intending Beneficiary must be a fully registered member of SEIFAC. B. Intending Beneficiary must maintain a SEIFAC Project account with SEIFAC Official Bankers with a minimum balance of at least N2,000.C. Intending Beneficiary must sign an undertaking to have a lien placed on their account if they qualify for the program. The lien will limit them from withdrawing from the account until the provided funds is used for the purpose it was provided.