Agric finance mobilisation begins
Kudzanai Gerede Business Correspondent
Government has already started engaging financial institutions in mobilising finance for the 2017-18 summer farming season to avoid resource restrictions which almost derailed the fruition of the strategic grain programme dubbed Command Agriculture last year, Post Business has learnt.
Command Agriculture, a three-year rolling national grain programme, faced challenges of late procurement and distribution of various farming inputs to participating farmers in the scheme in its initial year owing to financial constraints. Despite its subsequent success Government has taken a more cautious approach this year by commencing resource mobilisation earlier to avoid similar challenges encountered in the current season.
Zimbabwe needed at least US$ 200 million last year to ensure adequate grain production for its citizens at a time the country was spending millions of dollars annually when importing grain to meet national demand.
The agriculture sector since going through a radical transformational process at the start of the century has been crippled by a lack of finance to ensure efficiency in production but is however poised for not less than 2.5 million tonnes of maize and small grains put together, thanks to Command Agriculture.
Addressing a Parliamentary committee on Sustainable Development Goals in the capital on Tuesday this week, permanent secretary in the Ministry of Agriculture, Mechanisation and Irrigation Development Mr Ringson Chitsiko said negotiations with prospective financiers were nearing completion ahead of the 2017-18 summer farming season.
“Right now mobilisation of financing for the coming summer season has started and serious negotiations with potential financiers are underway and almost nearing conclusion so that inputs procurement and distribution should be done commencing now such that come September we have all farmers with their inputs.
“With respect to financing of agriculture, Government has joined hands with financial institutions and private companies. In the just ended season Command Agriculture was financed by private sector to the tune of US$ 160 million with Government giving necessary securitisation of that particular financing. About US$ 30 million came through the Presidential Input Scheme and other facilities were unable to come to fruition during the previous season,” he said.
The finance model has seen companies like Delta coming in with support to the sector by contracting farmers to produce small grains which they in turn use in the brewing of beer earning applause from analysts who are calling for more intervention from other huge corporates along the agriculture value chains.
Government is already in the process of registering farmers under Command Agriculture for this year.
“We have moved to the second crop (after maize) which is wheat where we have registered 57 900 hectares and in terms of contracting, we have already contracted 39 000 hectares from 1 840 farms to grow wheat. That is for Government. Private sector has contracted 14 000 hectares and these are companies who deal with grain,” said Mr Chitsiko.
Meanwhile, Government has mobilised US$ 186 million for the purchase of grain from farmers under Command Agriculture with US$ 34 million already deposited to the Grain Marketing Board signalling the beginning of the marketing and payment for delivery of grain to the GMB.