US$50m buffer fund to boost farmer payments

GOVERNMENT is in the process of setting up a US$50 million crop buffer fund administered by the AFC Bank to expedite payments to farmers who usually experience challenges due to delays in payments for grain deliveries to the Grain Marketing Board (GMB).

Lands, Agriculture, Fisheries, Water and Rural Development Minister Dr Anxious Masuka revealed this yesterday during his tour of the Bubi-Lupane Irrigation Scheme in Lupane, Matabeleland North.

The irrigation scheme is part of the Government’s initiatives to transform rural livelihoods and communities are shareholders in the project where they also provide labour at the 180-hectare scheme.

During the tour, Minister Masuka was informed that the scheme has incurred penalties from the bank for the delays in servicing their loan as a result of late payments by GMB. “We are establishing what we call purchase buffer fund at AFC Bank to address the challenge of late payments by GMB and it is going to be funded by another innovation that we have put forward,” said the Minister Masuka.

He said AFC Bank was given some land, which they will develop and sell to raise the US$50 million crop purchase buffer fund.

“The bank will therefore pay for crop deliveries to GMB instead of waiting for Treasury to release the money which might delay,” said Minister Masuka.

He said the bank will later be refunded by Treasury. Minister Masuka said Government owes farmers US$44 million for the winter wheat crop, which could have easily been cleared through the crop purchase buffer fund.

“We could have paid the farmers from the US$50 million buffer fund because what we owe farmers is just US$44 million,” said Dr Masuka.

He said delays in paying farmers was affecting their planning hence the need for this buffer fund. Minister Masuka said it was unfortunate that Bubi-Lupane Irrigation Scheme members had to incur penalties despite impressive production.

“What we understand is that after good performance, especially in wheat production where each of the 90 families were supposed to receive US$800 per head as dividend, this has been reduced substantially because of penalties for delays in servicing loans. This is because they have not been paid by

GMB which is waiting for money from Treasury,” said Dr Masuka.

To address the challenge, he said the Government will facilitate a meeting between AFC bank as the financier and Arda, the estate manager to resolve issues relating to penalties.

Dr Masuka said the Government has also set in motion measures to expand the Bubi-Lupane Irrigation Scheme from the 180ha under irrigation to nearly 500ha.

He instructed Arda management to establish a master plan for the irrigation, which will also address value addition and beneficiation of crops produced at the irrigation scheme.

“We want farmers to produce mealie-meal, cooking oil, bread and other such products that will give them more money. We also want the scheme to be fully mechanised and in this regard, we will facilitate their access to mechanisation equipment,” said Minister Masuka.

He later handed over a tractor to the scheme, which he said was a donation from the President.

Dr Masuka said the Bubi-Lupane Irrigation Scheme is setting the tone for rural industrialisation as enunciated by President Mnangagwa.

He said the model where community members are stakeholders with Arda providing technical expertise is being replicated across the country.

“From 460 irrigation schemes dotted around the country, we have now handed over to Arda 390.

We are slightly behind as we had hoped to conclude the handover by end of last month,” said Minister Masuka.

He said all the irrigation schemes are establishing companies and the farmers are the shareholders.

-@nqotshili