IN a bid tame runaway government expenditure and reduce the fiscal deficit Finance and Economic development minister Mthuli Ncube says private sector players in particular banks will be incorporated into the command agriculture programme.
The command agriculture programme which is in the third year had become one of the major contributors to the widening fiscal deficit which is set to end the year at 11% of GDP.
As of August expenditure on agriculture, had reached US$1.1 billion against an annual budget target of US$401 million, while high default rates by beneficiaries of various agricultural programmes has compounded the situation.
Inputs to the command programme are financed by fuel company Sakunda with the government providing guarantees for beneficiaries.
While addressing media personnel at a post budget engagement today, Ncube said the command programme had achieved its target of putting in place 500 000mt into the strategic grain reserves ensuring the country will be able mitigate the effects of EL Nino and support vulnerable households next year.
“Command has delivered results as the country’s strategic grain reserve has 500 000 mt in place. However, there are players missing in the command programme in particular banks and we would want to crowd in banks and other private sector players to contract farmers.
Banks have indicated they are ready to come in once we have revised the 99 year leases and we are looking into that once we are done government will only offer support through providing guarantees through financial institutions in which we have a shareholding
Companies such as Delta have run successful contract farming schemes for their raw material and that’s the way we want to go”.
He said export crops should also be able to attract funding from off shore credit lines.
Ncube said the 2019 budget will only be confined strategic areas such as support for vulnerable households, extension services; Research and development; dams and irrigation development and Mechanisation.
The command agriculture had grown to encompass other crops such as tobacco, cotton, soya beans, livestock and fisheries. ENDS