Nigeria's Bank of Agriculture (BOA) has launched a ₦200 billion (about $151 million) Guaranteed Minimum Price (GMP) Programme, creating a price floor for farmers producing key grains while establishing a mechanism to buy, store and release commodities when market conditions threaten either farmers or consumers.
The programme, launched in Abuja, is being implemented by BOA in collaboration with the Federal Ministry of Agriculture and Food Security and the Nigeria Commodity Exchange (NCX). It is designed to protect farmers from sharp price declines that can follow harvests while helping moderate food prices when supplies tighten.
The initial focus is on maize, sorghum and soybeans, with the programme targeting more than 500,000 farmers. BOA says it expects to aggregate at least 500,000 tonnes of grain, while the longer-term aggregation ambition is about one million tonnes.
For maize farmers, the intervention comes after a difficult period in which cereal prices fell sharply in parts of Nigeria. Under the mechanism, eligible farmers who produced maize during the 2025 dry and wet seasons can receive a guaranteed floor price of ₦350,000 per tonne (about US$264) where prevailing market prices fall below that level.
The model addresses one of the recurring problems in Nigerian agriculture: farmers often have to sell immediately after harvest because they need cash to repay loans, purchase inputs, or finance the next production cycle. When many farmers harvest at the same time, that pressure can drive prices down and leave producers selling below their production costs.
Under the GMP mechanism, BOA and approved farmer aggregation companies will purchase eligible produce from farmers, with payments made directly into farmers' bank accounts. The grain will then move into certified warehouses through the commodity-market system, where it will be graded, weighed and backed by warehouse receipts.
The grain will not simply remain in storage. When market prices rise sharply, BOA can release stocks back into the market at a moderated price. BOA's managing director said stored grain could, for example, be released at around ₦380,000–₦390,000 per tonne (about US$287–$294) if market prices rise toward ₦500,000 per tonne (about US$377).
The Nigeria Commodity Exchange will provide much of the market infrastructure, including warehousing, commodity grading, price discovery and warehouse receipts. The system is intended to improve transparency while ensuring that farmers can use stored commodities as part of a more organised market.
That distinction is important. BOA has stressed that the programme is for genuine farmers, not commodity traders. Farmer aggregation companies will help identify and collect eligible produce, while technology and farmer verification are expected to ensure payments reach the producers supplying the grain.
If implemented effectively, the scheme could also change how farmers approach production. A more predictable floor price can give growers greater confidence to invest in seed, fertiliser and other inputs without fearing that a strong harvest will itself trigger a damaging price collapse.
NBF Insight
Nigeria's biggest test with the ₦200 billion (US$151 million) GMP programme will not be announcing the price floor; it will be executing it at farm level. If farmers can actually sell at the guaranteed price, receive payment promptly and access reliable aggregation and storage, the scheme could reduce distress sales while building a strategic grain buffer for the country. But if access is captured by intermediaries, the programme risks becoming another intervention that looks large on paper while delivering less value to the farmer.
