adminHarare Bureau
Most A2 farmers have turned to contract farming this season after failing to access funding from banks as the financial institutions demand collateral security before giving out loans.
A number of A2 farmers will this season produce maize, soyabeans and sorghum under contract farming as they do not qualify for Government’s input support programme.
Government supports communal, A1 and small-scale farmers while A2 farmers have to source funding from banks.
The Zimbabwe Commercial Farmers Union president Mr Wonder Chabikwa last week confirmed most farmers entered into contract farming agreements this season after banks snubbed them.
“This is a good move since most A2 farmers were having problems accessing funding from the local banks. Local financial institutions require collateral in form of immovable property and are charging interest rates ranging from 18 to 25 percent,” he said.
Mr Chabikwa said although farmers who enter into contract farming had a ready market for their produce, the challenge was that food could be channelled towards stockfeed instead of the strategic grain reserves.
Zimbabwe Farmers Union second vice president Mr Berean Mukwende said contract farming was the only option on the table for farmers.
“Contract farming has become the only option although some contractors are also facing liquidity challenges. Some companies are having difficulties accessing funds on the money market and this will affect the hectarage they intended to support,” he said.
Ministry of Agriculture, Mechanisation and Irrigation Development Deputy Minister responsible for Crops David Marapira is on record urging farmers to enter into contract farming.
Online Reporter