adminThe saying that when the agriculture sector sneezes, the economy catches a cold aptly underlines the importance agriculture plays in economic development. With a contribution of 16 percent to the Gross Domestic Product, agriculture remains key to economic turnaround.
This is why efforts must be made to ensure that a supportive environment is created for the sector to thrive. It is folly to envisage a vibrant economy without a flourishing agriculture sector for it is a fact that agriculture is indeed the lifeblood of the economy.
It is for this reason that funding is to the agriculture sector what the heart is to human body. We need the heart to distribute blood to all parts of the body in as much as we need funding to be able to produce crops, livestock and achieve food security.
This is why we applaud efforts by CBZ to raise US$100 million to support agriculture and related infrastructure. We also report in this issue that the Bankers Association of Zimbabwe, a representative body of the banking sector, has mobilised US$620 million to fund agriculture.
Lack of funding during the dysfunctional inclusive Government had been the biggest impediment to boosting productivity on the farms as farmers struggled to secure loans from banks to get on with the business of farming.
The situation was made even worse during the life of the inclusive Government as the then Finance Minister, Tendai Biti, was reluctant to support agriculture.
His resistance to seeking funding for farming did not come as a surprise as he was coming from an ideologically bankrupt political party that was launched to fight land reform.
Farming needs money and without it, there can never be any production to talk about, let alone food security.
Farmers need money to buy inputs, such as fertiliser, seed, chemicals and pay for tillage and labour. It is quite easy for a well-resourced farmer to achieve high crop yields.
As a country we are renowned as a net exporter of maize but sadly because of lack of funding and erratic rainfall, we have become a net importer, weighing heavily on the fiscus.
While efforts to raise money to fund agriculture are most welcome, we are not sure how the facility will be accessed by farmers and how different the facility is from others that banks, have in the past, extended with very little uptake owing to the high interest charges and collateral security demanded.
In the past, banks always asked for immovable property as collateral and this resulted in many farmers failing to access the loans.
If we really want to see agriculture moving forward such inhibitive demands must be removed to make the facility farmer-friendly.
We, however, appreciate that banks have raised the money through borrowing and that it must be repaid with interest and obviously it will not be free money to farmers.
If the interest charges are made reasonably low and the demand for immovable collateral relaxed then all farmers will be able to access the facility and easily turn the vast tracts of land into greenbelts.
The Government can become the guarantor to enable farmers to be financed and in the event of defaulting, it will be accountable. This can be easily done the same way the Government did it in 2000 or thereabout when it launched the Inputs Scheme that was administered through the Grain Marketing Board.
While there were also problems associated with the distribution of inputs, the majority of farmers got seed, fertiliser and chemicals based on offer letters and hectarage under cropping.
For us, this way farmers can go round the problem of high interest charges and collateral security, as Government, being the guarantor will take care of the interest charges and the collateral issue.
Farmers would then repay the inputs by selling to the GMB and the cost of inputs deducted through a stop order system.
For now this is the route we must take if we are serious about rebounding the agriculture sector.
Such a move by Government will resonate very well with Zanu-PF’s winning election manifesto that identifies agriculture as a key driver of economic turnaround.
Online Reporter