‘A1 permits not bank loan guarantee’

Minister Mombeshora
Minister Mombeshora

The new A1 land permits are not a guarantee that farmers will secure bank loans but are crucial to providing beneficiaries security of tenure for an indefinite period, Government has said.
Lands and Rural Resettlement Minister Dr Douglas Mombeshora told this publication last week that the permits provided beneficiaries with permanent residence.

Constitutionally, all farm land remains under the State. Farmers are, however, in agreement with the provisions, saying guarantee to land took precedence over bankable collateral, since there were several avenues open to secure financing.

Previously, smallholder farmers relied on offer letters issued by district administrators in conjunction with village heads, councillors and chiefs as tenure documents. The letters have courted controversy over allegations of irregular issuance.

The new permits, however, guarantee beneficiaries tenure indefinitely and are transferable between spouses and children in terms of inheritance laws. The Bankers’ Association of Zimbabwe has asked bank chiefs to examine the documents and give individual assessments with regards to their acceptability as collateral.

A nationwide roll-out of the permits is expected to start next month after provincial and district lands officers complete their fact-finding exercise on plots in their respective jurisdictions. The exercise involves on-site visits to collect data such as plot maps, farmers’ identity particulars and land utilisation.

Only productive farmers will receive the permits. “A1 farmers are guaranteed at least one hectare of land for residential purposes, six of arable land and at least another hectare for communal grazing.

“A1 permits do not give farmers ownership of land but they are a guarantee of permanent right to the land which can be revoked when the farmer fails to meet laid-down conditions,” said Dr Mombeshora.

“Farmers can carry out infrastructure developments on the land and in the event that the permit is revoked they will receive fair compensation for the developments. In such an event, a professional evaluation will be carried out to determine the value of the developments.

“However, land is not part of the value since it remains State land. We have directed our provincial lands officers to meet with the district lands officers to identify A1 farms in their areas and carry out visits on the farms and allocate plot numbers as well as collect other relevant data about the plot and the owners. “This process will likely take up to a month before we commence the full-scale roll-out.”

However, Zimbabwe Farmers’ Union second vice-president Mr Berean Mukwende said Government’s commitment to organised farming was being hurt by punitive interest rates charged by banks.

“To use land as security is not ideal at this stage of our land reforms,” said Mr Mukwende.
“For starters, local banks’ loan interest rates and penalties remain astronomically high and no farmer in his right senses would want to borrow under such a regime.

“Most farmers will surely fail to pay back their loan obligations.
“How do you justify a situation where we have banks charging interest rates of up to 50 percent in an economy where we are using United States dollars?

“In most cases banks end up appropriating the farmer’s property and equipment and this is detrimental to the development of the sector.

“Before we can talk about using land as security there is need for capital reforms in the country whereby the banking sector is reformed to support the new tenure dispensation we have. While as farmers we do need financial support, we also need reforms first.”

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  • Zingizi

    Land ngaitengeseke, so that vanoda kutengesa vatengese. Ndiyo Independence yacho, vanhu kuita zvavanoda, not to be frog marched. The government may sell those pieces of land to the allocated people, not to make it remain stateland. If these plots become transferable then they can attract capital from all corners of the earth.

    • Beastie!

      In other words you are saying lets go to the status quo ante, what it was before the land reforms that took place, is it not? That implies that the sanctions that devastated the economy and decimated lives including that of a whole generation were well worth it to the sanctioning entities as it signifies capitulation, right? So the rich white farmer and global capitalist corporations who have been busy influencing banks not to give agricultural loans to the new farmers and demanding that those banks that do should be inviting ridiculous interest rates should succeed in reversing the land reforms? Does this mean to you that everything was vain? Just asking!

      • Tawanda

        Put yourself in the shoes of the bank, would you like to lend someone your money without collateral????? What Zingizi is saying is that the government should sell the land to those occupying it, and the farmers can acquire title deeds for those farms, which they can use to get funding from banking institutions at favorable interest rates. Check the youth fund the rate of loan repayment default rate, its very high for banks to ensure they get a return on the loan funds, the title deeds will do that trk for them. the government has then have to put a law in place which directs the sell of the land to indigenous Zimbabweans not to foreign nationals.

  • anon

    The A1 permits are to establish that, under the Land Reform Programme, the land was not given back to the people, but directly to the State. So much for empowerment. If farmers have no collateral, they have poor access to bank loans making these permits a useless piece of paper. When the State wants to use land allocated to one person and give it to someone else, anyone who thinks that compensation will be paid is dreaming.