Zimbabwe farmers cry out for $1 billion pie

Zimbabwe farmers cry out for $1 billion pie
Published: 28 August 2017
Farmers' organisations say the over $1 billion that is injected annually into agriculture by banks is not serving its purpose as their members continue to struggle to access funding due to stringent requirements set by financial institutions.

According to official figures, the banking sector has availed $1,104 billion for the 2017/2018 agriculture season as compared to $1,119 billion in the 2016/2017 season.

The money is targeted towards assisting farmers for the production of maize, soya, cotton, livestock, and tobacco, among many others.

Zimbabwe Commercial Farmers Union president Wonder Chabikwa said the real farmers on the ground had failed to access funding from banks because they do not have security.

"Every year there is an announcement by banks of agriculture funding but the real farmers on the ground are failing to get these funds because of the controversies around the 99-year lease," he said.

"The bulk of the farmers are unable to access these monies because of collateral issues.

"The banks demand physical property which is houses and other buildings which farmers don't have.

Chabikwa said in the end, the majority of the beneficiaries were the contractors who ended up lending the money to farmers at high interest rates.

Zimbabwe Farmers' Union executive director, Paul Zakariya concurred with Chabikwa, saying farmers were unable to access the funding due to collateral problems.

"The banks have always unveiled money for agriculture but the conditions are very limiting," he said.

"A few farmers are able to access these funds. Those who have security outside their farm areas are the ones who can access the funds but ordinary farmers who have permits or the 99-year leases never get anywhere near those funds."

Zakariya said there was need for government to give out title deeds or to improve on their 99-year leases to ensure they were bankable.

He said government could set up a guarantee fund on which farmers could borrow against.

CBZ bank group executive (marketing and corporate affairs), Laura Gwatiringa said the bank had set aside $50 million for the 2017/2018 summer cropping season.

"Basically, we want our farmers to prove that they have the necessary skills and experience to run a successful farming project, with the help of our experts in the field of agriculture," she said.

"While access to suitable land and availability of collateral is key, our emphasis is on the viability of the project itself."

Gwatiringa said the bank funded most cash crops that included maize, tobacco, soya beans, wheat, barley, sugarcane and any other crops that were commercially viable and supported the government's food security and nutrition cluster.

ZB bank head group corporate services, Shadowsight Chiganze said the bank had set aside a funding budget of $20 million for the summer cropping season.

"Major crops to be funded include tobacco, maize, soya beans, sugarcane and horticulture," he said.

"Each enterprise must demonstrate its viability in terms of markets, technology and management, among other things."

Apart from these facilities, government signed a $478 million agreement with Sakunda, an energy company, and three banks CBZ, Barclays and Ecobank to finance the 2017/18 summer farming season in a bid to improve food security under the command agriculture programme.

In the 2016/2017 season under the command agriculture programme, 168 666 hectares of land was planted, far short of the targeted 400 000 due to delays in the distribution of inputs, among other things.

Official figures show that 36 536 farmers were contracted under the programme during the 2016/17 season.

Agribank CEO Sam Malaba said the bank was assisting farmers and recently floated $20 million agro bills.

"In conjunction with FBC bank, the bank is raising $20 million agro bills for the 2017/2018 agriculture season, among many other facilities," he said.

Malaba said Agribank had partnered major tobacco industry players like Tobacco Industry Marketing Board (TIMB) and the Tobacco Research Board for the development of the tobacco industry, which was a major foreign currency earner in the country.

Malaba said the bank had increased its funding facility with TIMB to finance the construction of rocket barns, as well as drip irrigation for small-holder tobacco farmers.

"The RBZ has availed a $28 million TIMB facility through Agribank designed to support production and productivity growth in the tobacco sub sector," he added.

"Under the $28 million facility, small-holder tobacco farmers will benefit from TIMB who will provide inputs whilst the bank provides working capital."
- the standard
Tags: Farmers,

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