AMA agro Bills chart the way forward for sector

2011/2012 season should have come as a huge relief for the country’s farming community as it brings a ray of hope for this vital sector.
Given the centrality of agriculture to our agro-based economy, it would appear that for some time there were no enabling instruments to spur the growth of agriculture.
Repeated appeals to have Treasury prioritise agriculture have over the past few years fallen on deaf ears.
The importance of agriculture cannot be under estimated, as it is the bedrock of the economy.
For the manufacturing sector to tick and regain its glory days it needs inputs from agriculture and this cannot happen when the sector continues to be under funded.
Up to 60 percent of raw materials used in manufacturing come from agriculture and for as long as we do not make resources available we will continue being a net importer of goods that we would otherwise be producing locally.
Over the years, Treasury has clearly let down the country at large, as it appeared non-committal over financing for agriculture.
It defeats logic that given the timing of the agriculture season and the announcement of the 2012 Budget statement in November, the Finance Minister failed to come up with a mitigating plan.
For as long as there is no consensus in the inclusive Government over the financing of agriculture, all efforts to turn around the economy will amount to naught.
We hope that the proposed three-year rolling financing strategy for the forthcoming seasons will come to fruition to enable farmers to access funding even before the presentation of the budgets.
It is in this perspective that the AMA agro-bills find relevance at a time that most farmers were crying out for a bail out.
Of particular interest in the agro bills is that up to US$21 million will go to the Grain Marketing Board, that has also been hamstrung with inadequate finances to settle what it owes farmers.
Another chunk of US$18,6 million will settle dues that Government owes seed houses and fertiliser companies, while another US$4,5 million will be used as seed capital for seed and fertiliser companies to start delivering seed and fertiliser for the 2011/2012 season.
Commercial, communal, A1 and A2 farmers will all benefit from a US$56,2 million new financing facility for all farmers.
The payment of the debt owed by the GMB to farmers will unlock cash into the agricultural sector, as farmers are able to utilise some of their cash in grain production related activities.
GMB has a huge task on their hands to exorcise its image and reputation as a buyer of grain that is capable to attract more grain and play a meaningful role in the food security needs of this country.
While the farmers should receive this as good news, they should equally be encouraged to be faithful partners and ensure that they honour their obligation to repay the funds that they are advanced.
AMA and the GMB are expected to come up with a workable stop order facility that ensures that the farmers settle their dues at maturity from sales proceeds of the financed produce.
It is critical that this stop order facility works and collection for financing repayment is effective. Side marketing that has previously ruined similar programmes for cotton and tobacco should not be allowed to rear its head in this scheme.
Grain production can be a viable business and the farmers should produce enough grain to pay their debts and still remain with extra grain for own use or trade.
The fact that the Government provided a 50 percent guarantee for the agro bills means that the risk is equally shared with the financial institutions. The major challenge facing both parties is to ensure that an efficient and effective stop order system to facilitate the collection of repayments is put into place.
There is need for a long term funding strategy for agriculture and this will no doubt avoid the fire-fighting and crisis management situation that is prevailing at the moment.
It is imperative for the Government to discuss and adopt a long-term and comprehensive agricultural policy including the funding thereof.
Improved agronomy and extension services are also pertinent to improve productivity, as providing inputs alone is not the ultimate solution. Matters of yield management and innovation, leading to higher productivity are also critical.
We should start now to salvage what remains of the season and for all future seasons to ensure that we enhance the food security of this nation.