adminofficial has said.
Trust Bank (southern) Regional Manager Mr Gerald Zhou said in an interview, the advent of promoting cash-based trade with small-scale farmers could greatly reduce social welfare dependency locally.
He added that the continued implementation of programmes such as Zimbabwe Agriculture Income and Employment Programme (Zim-AIED) would reduce barter trade and improve liquidity amongst cash strapped small-holder farmers.
Mr Zhou said once money-based transactions gain gravity the lives of subsistence farmers who sell agro-produce for school fees payments, medical services as well as to buy other foodstuffs will improve.
“We view grain and livestock which most small-scale farmers have as bankable assets and in most cases small scale-farmers sell or barter trade when matters of urgency arise.
“However, the valuation process or equating of goods is in most cases not balanced hence the rural folk are short-changed and their standard of life does not improve . . . hence the need for financial inclusion which promotes money as a medium of trade,” he said.
Mr Zhou added that extension of loan services, as a capital injection tool to minor agro-sector players, would stimulate growth within the industry in rural areas.
“Tailor made loans with low interest rates channelled to producers, agro-commodity brokers, processors and retailers will foster development and improve lives in the rural set-up,” he said.
Zim-AIED is a programme that provides funding to three financial institutions under a commercial lending facility known as Agri-Trade.
It seeks to avail liquidity for agribusiness, by providing lines of credit to smallholder farmers and other key actors in the value chain.
The financial organisations involved include CABS, Trust Bank and MicroKing. As of the end of the third quarter this year, Agri-Trade has disbursed a total of US$2,6 million to over 300 borrowers.
Mr Zhou added that they were anticipating a two-fold increase in amount accessible through the scheme to increase by 200 percent in the final quarter.
Nembudziya based A 1 farmer Mr Wellington Masiyiwa (30) who produces maize and cotton and is a beneficiary of the facility said until recently he was forced to exchange grain for groceries with agro-commodity brokers.
From the transactions he says; “I would then have to hustle and resale the groceries to get the much needed cash to pay fees for my two kids as well as my deceased sister’s four children,”
He said the situation was also difficult for his labourers as in some instances in the absence of liquid cash, grain and groceries were the remuneration package.
“The barter trade model is a great disadvantage to us farmers as at times some commodity brokers dictate unfair terms, curtailing the viability of our source of livelihoods,” he said.
Mr Masiyiwa, however, applauded the advent of improved liquidity saying they could now bargain for their produce better. Adding that; agro-commodity brokers in the area were offering favourable cash payments
due to competition brought by more cash buyers.
Meanwhile, Bulawayo based Perodum Investments Chief executive officer Sizimile Gumbo said liquidity problems had recently been stunting agro-commodity growth.
She said this had curtailed commodity supply to areas like Matabeleland South and Masvingo.
“Farmers have transactions that require hard cash and are now more reluctant to barter trade their produce,” she said.
Gumbo said the availing of solid lines of credit to small players had boosted the sub sector’s activities.
“There is a great demand for agriculture products in areas where there is a shortage and there are many areas where there is a surplus . . . hence there is at times no need to import,” she said.
She added that the Grain Marketing Board’s (GMB) challenges in settling its debts with farmers had further prompted farmers to demand cash.
“Agro-trade is fast becoming a cash cow as more small players are now exploiting the weaknesses present at GMB and some banks are granting loans on the premise of awarded tender letters from institutes such as the Zimbabwe Prison Services,” said Gumbo.
Online Reporter