FAO Links Rising Food Insecurity To High Interest Rates, Input Costs

With a targeted $516m for humanitarian needs across Borno, Adamawa and Yobe states, the Food and Agriculture Organisation (FAO) said that high interest rates are undermining Nigeria’s food production.

Given a projected 33 million people at risk of acute food insecurity or worse in 2026, the FAO said it is repositioning agricultural support as a central pillar of Nigeria’s 2026 Humanitarian Needs and Response Plan (HNRP), with a focus on safeguarding livelihoods, stabilising food access, and reducing long-term dependency on emergency aid.

Speaking in an exclusive interview with THE WHISTLER, the FAO Representative in Nigeria and ECOWAS, Dr Hussein Gadain, said the organisation’s approach under the HNRP prioritises early targeted interventions that enable vulnerable households to sustain themselves amid worsening economic, climate, and conflict-related pressures.

Speaking on structural constraints facing farmers, he pointed to the high cost of credit and agricultural inputs in Nigeria as a major policy challenge that undermines competitiveness and food affordability.

The Federal Government, through the Central Bank of Nigeria, had retained the country’s monetary policy rate (MPR) at 27 per cent, which serves as the baseline interest rate in the economy; other interest rates are set on this.

The CBN Governor Olayemi Cardoso attributed the decision to Nigeria’s headline inflation which remains high at double-digit, with its recent figure at 15.15 per cent.

Addressing the concerns the FAO Boss said, “In many countries, getting a single digit has little or zero bottlenecks for farmers. And this is one of the elements that we need to work on more because in Nigeria, loans are very high.”

He argued that access to affordable financing, alongside subsidies for critical inputs such as fuel and mechanisation, is essential to lowering production costs and strengthening domestic food systems.

“So, we want to see how the government can support the youth to get a loan or credits with one digit.

“Through this, the cost of inputs would be reduced. Even now we have a crisis. Nigerian farmers produce food, which are more expensive than that imported.

“Because the inputs are not subsidised, especially diesels for pumping water, for irrigations, for tractors, for ploughing lands. So, these are critical issues, and this is a policy issue that must be addressed.”

Speaking further Gadain explained that timely access to agricultural inputs allows households to produce food independently, protect their assets, and maintain dignity even in crisis conditions.

“So, the HRPN represents a shared commitment for all of our community in the country and particularly the community’s facing the most food security. As FAO, our key message today is to save livelihoods and lives. When farmers receive seeds and tools on time, they are able to produce their food and also when livestock are protected, and when communities can irrigate on small plots behind their house, they’ll be able to produce the food they need.

“These interventions preserve dignity, and stabilise food access by families, and reduce the need for retreated emergency assistance, especially during these difficult times, where the global funding is shrinking.”

Against the backdrop of declining global humanitarian funding, FAO’s 2026 HNRP strategy is designed to maximise impact through early agricultural action.

The 2026 projections reveal that 5.9 million people in Borno, Adamawa and Yobe will require humanitarian assistance in 2026. Of these, 2.5 million individuals, about 42.37 per cent of the total are expected to benefit from the $516m intervention.

The 2026 targeted amount reflects a 43.3 per cent decrease from the $910m projected in 2025.

According to Gadain, to alleviate shock, the organisation plans to prioritise the delivery of farm inputs ahead of the main planting season, which begins in June, while also supporting dry-season farming activities to extend food availability across the year.

“So, in 2026, for this HNRP, FAO intends to focus on timely agricultural inputs ahead of the season, which starts this June. We will also support farmers planting during the dry season. Also, FAO would like to provide livestock health services, including feeds and stock, because livestock are very good assets for rural communities, they rely on them.”

Beyond crop production, FAO’s interventions include small-scale irrigation and water management systems aimed at boosting household-level food production, particularly of nutritious crops such as vegetables. Gadain noted that even limited land and water access can significantly improve food security when properly supported.

He added, “Small-scale irrigation and water management. As they mentioned, we’re getting a small product that can be enough for families to produce the food needed, and especially nutritious food like vegetables.”

The FAO is also expanding its “cash plus” model, which combines financial assistance with agricultural support to strengthen households’ purchasing power while they cultivate and harvest food. This approach, he said, helps families bridge food gaps during the farming cycle.

“We intend to do what we call a cash plus package. This is when we link the farmers and the market. So families need cash before they grow their food. And in this situation, everyone will be able to provide the cash. While people are planting and harvesting, they have the cash to buy the food.”

Gadain described Nigeria’s food insecurity situation as multi-dimensional, driven by overlapping shocks that require coordinated action across sectors and institutions.

He pointed to economic instability, climate-related disasters, and protracted conflict as major drivers, particularly in the North-East and North-West.

“So, the situation is compounded by economic shocks, climate change, floods and droughts, and the conflict, definitely in the northeast and Northwest. So these are the contributing factors. So the situation is complex and requires a lot of concerted efforts between the government and the partners. including the UN and the development partners.”

While agriculture accounts for a relatively small proportion of the overall HNRP budget, Gadain stressed that integration not scale alone is critical to achieving sustainable outcomes.

He argued that coordinated targeting and complementary interventions across sectors can reduce humanitarian caseloads over time.