The Sunday Mail
A phenomenal development happened on Friday.
This is set to transform not just agriculture but the economy at large in a big way. The launch of the Agriculture Finance Corporation is indeed a game-changer.
This new vehicle that the old Agriculture Bank of Zimbabwe has morphed into, is exactly what the doctor ordered. Suitable financing mechanisms have been the greatest challenge in agriculture.
AFC’s four subsidiaries, the AFC Commercial Bank, AFC land and Development Bank, AFC insurance and AFC Leasing Company provides the right package to take farming to a higher level.
Such a finance institution was the backbone of the agricultural sector before Independence in 1980. The successes by commercial farmers of old and the entire value chain hinged on an institution that provided capital at concessionary interest rates for longer repayment periods. It carried packages for short, medium and long term financing. Each with favourable terms that encouraged the farmer to reach his/her potential.
Farmers could borrow to capitalise their farms under very productive and progressive lending terms. They did not have to kiya-kiya or hustle to get by. They had a solid system that kept them firmly on the ground.
It is with this knowledge and information that we celebrate the launch of AFC on Friday.
Agriculture is surely headed for brighter times. The star in this sector continues to rise. It has been a great season on all fronts. The launch of the AFC is putting the icing on the cake as farmers harvest their summer cops while preparations for winter cropping are already under way.
That this institution will cater for all farmers from communal right through to commercial provides the solution to the many challenges that had beset the Zimbabwean farmer for a long time. The desire and passion to achieve has always been there but securing requisite funding under the right terms has not been easy.
Most banks had reduced lending to the agriculture sector due to the inherent risk of agricultural production and lack of collateral by small scale farmers among other challenges. Those that continued to lend offered restrictive terms not viable to the sector.
Access to finance is key to unlocking the full potential resident in agriculture. Funding helps in the application of new and better farming methods while farmers can adopt improved crop varieties and livestock breeds once there is enough funding available.
Therefore, AFC, which had been scheduled for launch by March 31 according to the National Development Strategy 1 document, will go a long way in ensuring that that happens.
NDS 1 is clear on the AFC mandate.
“The Land Bank is mandated with undertaking expanded banking and financial services provision to all categories of farmers in Zimbabwe (A2, commercial, A1, resettled and communal farmers), thus underpinning agriculture recovery and productivity.
“The Government will adequately capitalise the Land Bank so as to deliver on the mandate for agriculture financing and development. The Land Bank will advance short, medium and long term capital for agriculture irrigation and infrastructure,” says NDS1
As it indeed notes, an agriculture sector that functions optimally in terms of knowledge, technology and innovation systems anchored on efficient and effective agronomic and animal husbandry practices will be able to survive climate change and other disasters.
Zimbabwe’s economy is largely agriculture-driven and it is, therefore, prudential that resources be directed towards ensuring the sector realises its full potential.
Demand for agricultural products such as tobacco, cotton, maize, macadamia nuts, sugar beans, sunflower, ginger, garlic, horticultural produce and much more is high both locally and internationally.
Every week Zimtrade releases information of market opportunities for crops and livestock through a column hosted by its chief executive Allan Majuru on this page.
Zimbabwe should begin to earn large sums of money from agricultural exports a few months from now. Here we are supposing that it is all systems go at AFC. N0 teething problems are expected as it is not an entirely new vehicle. Even in instances where this may happen, solutions should be readily available so that the financial institution makes an immediate impact.
The thirst for funding is huge among farmers but we do not doubt AFC’s capacity to quench this. We are sure they have done enough market research and are ready to roll.
Other finance facilities set for introduction under NDS1 should also effectively complement AFC.
Government has said such strategies as strengthening the use of Public-Private Sector Partnerships, implementation of smart subsidies, promoting weather-based agriculture, reviewing contract farming provisions to become more binding and to include timely payments, and the establishment of a stop-order system to promote contract farming to cover all crops and livestock should do the trick for the agriculture sector.
Furthermore, continued efforts to link the farmer with research, extension and agriculture education will naturally improve production processes and yields. A programme being conducted by the Government and the European Union, the Zimbabwe Agricultural Knowledge and Innovation System(ZAKIS) has seen farmers benefit from the convergence of research, good agricultural practices and dissemination of information.
Also, continuous capacitation of extension workers, promotion of policies that encourage adoption of digital and modern agriculture production, and marketing technologies should combine to bring out the best in farming. The development of new crop varieties and management technologies is plausible.
A US$8,2 billion agriculture sector by 2025 is, therefore, not a mirage but a reality set to manifest soon. The President was not being over-ambitious when he said Zimbabwe would soon be Africa’s breadbasket once again.
“We are having an agricultural revolution! Once more we shall become the breadbasket of Africa.
In Zimbabwe between 2020 and 2021, crop yield is expected to increase by 199 for maize harvest, 128 percent for the harvest of traditional grains, 94 percent for cotton harvest,” he said on Twitter.
Indeed so much is happening in this sector!
Programmes have been launched to drive infrastructure development in the sector. AFC will also spearhead mechanisation through one of its subsidiaries.
This should assist farmers that have been struggling with archaic farming methods that have not only compromised yields but made farming more difficult than it actually is.
On their part, farmers should ensure they maximise on all these available facilities and make informed decisions that impact the economy positively.
Gone are the days when farmers would access inputs or get loans which they would divert for personal use. Every penny will need to be accounted for.
Farmer organisations and other support services should do their part to ensure efficient land preparations and effective planting and harvesting so the national basket can overflow with produce. The zeal that has been expressed before should be demonstrated once again as farmers make their way to the bank.
AFC’s success rests in the hands of stakeholders in the agriculture sector.
Government has done its part and the onus is on the farmers, their representative organisations and everyone along the value chain to ensure a good return on investment.
In God I Trust!
Twitter handle: @VictoriaRuzvid2; Email: [email protected]; [email protected]; WhatsApp number: 0772 129 992.
