By Ndafadza Madanha
COMMERCIAL FARMERS will be supported to the tune of US$253m through a contract inked between Government and various local banks to support the 2020/21 farming season.
Under the agreement Government through treasury will provide guarantees to qualifying farmers while those who have defaulted on previous initiatives will not be accommodated.
“Government support is being complemented by private sector and individual farmer initiatives as well as development partner support.
Consequently, for the 2020/21 farming season, a contract equivalent to US$253 million has been signed with local banks to support commercial farmers, and Government is providing guarantees on a case by case basis.
However, Treasury, the GMB and the respective banks will cooperate on loans recovery to ensure sustainability of the facilities. Currently, already the financing initiative excludes defaulting farmers,” said Minister of Finance & Economic Development Professor Mthuli Ncube.
Further Professor Ncube said the Government took a decision to re-model and restructure Agribank into a Land and Agriculture Development Bank as part of measures to strengthen and diversify agriculture and rural financial services across the entire agriculture value chain.
He said restructuring of Agribank will also promote and complete a sustainable agrarian reform process for accelerated development of the country. The LADBZ will be capitalised through the Budget from 2021.
Meanwhile, Professor Ncube said Government is pursuing the issue of 99-Year Leases, which are acceptable to financial institutions as collateral and also taking cognisant of provisions in the Constitution.
Currently, banks are still reluctant to accept the 99 year lease also on account of tradability a major impediment to acceptability.
Fundamental to the projected economic growth, is resolving the security of land tenure and adoption of climate smart agriculture strategies.
Professor Ncube says Government remains available to overcome any challenges that might be encountered by farmers and banks with regards to acceptability, for borrowing from local banks of the new version of Zimbabwe’s 99- year land lease issued to farmers.