Performance of Matching Grants and Outgrower Scheme in Addressing Smallholder Farmers’ Financial Constraints: An Assessment of APPEALS Project in Kano State, Nigeria

Abstract

This study examines the extent to which matching grants and out-grower schemes, as strategies 
within the Agro-Processing, Productivity Enhancement and Livelihood Improvement Support 
(APPEALS) Project, addressed smallholder farmers' financial constraints in Kano State. The 
APPEALS Project was a six-year initiative (2018-2023) developed by the Federal Ministry of 
Agriculture and Rural Development in collaboration with the World Bank. The project aimed to 
enhance the agricultural productivity of smallholder farmers by improving access to agricultural 
inputs and technologies through matching grants supporting investment, and linking farmers to 
the supply chain via an out-grower scheme. Data collected were analysed using descriptive and 
inferential statistical tools. Partial Least Squares-Structural Equation Modelling (PLS-SEM) was 
employed to test the hypotheses. The study found that, through the matching grant, the project 
successfully removed the financing constraint for beneficiaries in accessing improved inputs and 
technology. The out-grower scheme eliminated problems associated with middlemen, 
transportation costs, and other expenses, as beneficiaries sold their produce directly to the 
companies (off-takers). Consequently, transactions worth ₦8,897,114,950.00 across the three 
value chains (rice, tomato, and wheat) were made between the beneficiaries and the off-takers. 
However, the project encountered several challenges, including political interference, where some 
beneficiaries were selected by politically well-connected individuals and, in many cases, were not 
genuine farmers. The delivery of substandard or counterfeit inputs also negatively impacted crop 
yields and frustrated farmers. The study recommends that politicians avoid interfering in projects 
of this nature, allowing project units (staff and management) to operate autonomously and interact 
directly with farmers. Furthermore, there is a need for the government to improve its timeliness in 
delivering inputs, ensuring they are available to farmers at least one to two months before the 
commencement of any farming season.