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support the 2011-2012 farming season.
The facility will enable farmers access fertiliser and seed on credit.
The Bills will be floated through CBZ Bank.
Finer details on how farmers can access the inputs, which they will pay for through a stop order facility after harvesting will be announced shortly.
Out of the US$100 million, US$56,2 million will support farmers’ input requirements, while the remainder will be used to clear liabilities from last season.
Government plans to direct US$21 million to the Grain Marketing Board to settle its arrears with farmers for maize deliveries made last season.
Another US$18,6 million will go towards clearing liabilities to seed and fertiliser firms that were not paid for supplies under Government-backed schemes.
A total of US$4,5 million will be given to seed and fertiliser companies to start supplies of inputs required for grain production this season.
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Funds raised from the AMA Bills will be accessed by communal, A1, commercial and A2 farmers and there shall be no collateral.
The Bills were launched by Deputy Prime Minister Arthur Mutambara, who also chairs the inter-ministerial committee on commercial financing of agriculture.
He said local financial institutions no longer had reasons not to support the agriculture sector. The event was attended by representatives of financial institutions, pension funds and stakeholders from the agriculture sector.
“Paying the fertiliser and seed companies what is owed to them by the Government and providing them with a 10 percent kick-start deposit of US$4,5 million will provide them with the liquidity they need for their operations, in particular the immediate movement of grain (seed maize) and fertilisers to depots and farmers throughout the country,” said the DPM.
“Pension funds will no longer have any excuse anymore (for not to fund agriculture), as this framework covers everything they have been asking for,” he added.
DPM Mutambara said no farmer should fail to produce because of lack of inputs.
The facility will have 50 percent Government guarantee, prescribed and liquid asset status and will be exempted from tax.
Farmers will access funds raised through the AMA Bills at a cost of 12 percent and the scheme will have tenure of between 270 and 360 days.
In line with pricing of bonds in the region, the Bills will be floated at a coupon rate of around 10 percent on a tender basis, but the effective rate to farmers will be 12 percent after 2 percent onward lending interest rate.
GMB will be tasked with establishment of a stop order system to ensure a portion of farmers’ proceeds will go towards paying for the inputs.
DPM Mutambara said grain production could be viable if farmers were given access to inputs.
He implored financial institutions and pension funds to support grain production and make it a success as happened in cotton and tobacco growing.
The DPM said although the Government was a pace behind in terms of preparing for this season, it was confident inputs will be given to farmers in time to make the 2011-2012 agricultural season a huge success.
Agriculture, Mechanisation and Irrigation Development Minister Joseph Made said the Government was concerned with the slow movement of fertiliser into the market.
He, however, attributed this to arrears for supplies from last season.
“The concern is what is owed to the fertiliser companies. Demand for fertiliser is higher than seed maize. Seed companies have moved as much as possible.”
But there is a worrying shortage of top dressing fertiliser (AN).
Measures will be put in place next season to ensure GMB’s capacity to buy grain, distribute it across the country and ensure inputs are fully paid for, as Government moves to commercialise local production of grain.
Funds raised from the AMA Bills will complement US$30 million grain/input swap and the US$45 million subsidy schemes provided for in the 2012 National Budget announced by Finance Minister Tendai Biti a fortnight ago.
leeroy