Farmers should not be cry-babies on agricultural financing issues but should take advantage of the various funding models on offer, Bankers’ Association of Zimbabwe president Dr Somkhosi Malaba has said.
Dr Malaba’s remarks follow an outcry by farmers over the terms that Baz has set for accessing a US$1 billion agriculture funding facility for the 2015-16 summer cropping season.
The bone of contention is collateral in the form of residential or business premises.
A good number of farmers are land reform beneficiaries with unbankable offer letters and 99-year leases.
Many of them also do not own residential properties.
Zimbabwe Farmers’ Union director Mr Paul Zakariya and Zimbabwe Commercial Farmers’ Union president Mr Wonder Chabikwa could not be reached for comment.
In an interview with The Sunday Mail last week, Dr Malaba said farmers could circumvent this requirement by enlisting for contract farming, outgrower schemes or the stop-order system.
He said by setting the requirements, the banks are simply protecting depositors’ funds as non-performing loans were escalating.
“Farmers should not cry all the time. What is important is creating a relationship with your bank.
‘‘A bank will never turn away a good client.
‘‘Being a good client means that farmers must maintain a good track record and a history of meeting repayment obligations.
“If you owe a bank, do not run away. If you experience challenges in repaying the bank because of drought or any other causes, the best thing to do is to come to the bank and explain that you have faced challenges in repaying.
“What we are seeing is that most people who complain that they are not getting money from the banks are those who owe lots of money to the banks.”
Dr Malaba said the stop-order system had worked remarkably in the tobacco sector, which has grossed US$555 million this year.
In the golden leaf’s case, banks register with the Tobacco Industry and Marketing Board through which farmers then sell their crop.
The banks then recover their money via the TIMB.
The system has also spurred success in the small-scale sugarcane industry.
On the other hand, most successful horticulture projects in Zimbabwe are anchored on outgrower schemes where farmers produce particular crops with a guaranteed market.
The envisaged warehousing system is another alternative under which farmers deposit farm produce in a warehouse in exchange for a farm receipt that can be used as collateral.

‘Invest in your land’

Sunday Mail Reporter
The best financing models for Zimbabwe’s agriculture sector can only be realised by encouraging farm investments, an expert has said.
Senior lecturer with the University of Zimbabwe’s Department of Agricultural Economics and Extension Dr Jacqueline Mutambara told The Sunday Mail that most farmers did not invest in their land.
“It is not enough to just own the land; you have to invest on the land. Maybe there needs to be a separation between the landowner and an investor,” she said.
“Some people are owners of the land, but are not investing on it. So, ownership is not enough to unlock the value of the land. You need to own and also invest. If the owner cannot invest, it is important to then consider partnerships.”
Dr Mutambara added, “The people on the land should also be willing to pay for the price of the land.
‘‘Farmers are not deriving value from the land because they go there for free. So, going forward, there may be need for the authorities to attach a certain value to the land.
“This will help determine who the true farmers are and it will also help to put the land to good use and unlock productivity.”