Maravi

Mozambique inks $25m farm deal with Standard Bank

Mozambique inks $25m farm deal with Standard Bank
Written by Reuters
Friday, April 03, 2009 7:00:58 PM

MAPUTO (Reuters) - Mozambique has signed a $25 million farm loans deal with Standard Bank, Africa's biggest bank by assets, to buy seeds and fertilizer and boost agricultural output, a cabinet minister said on Thursday.

Minister of Agriculture, Soares Nhaca, told Reuters the money would be available in August this year.

Standard Bank said in March it will provide $100 million over three years for loans to small farms and agricultural businesses in four African countries - Ghana, Mozambique, Tanzania and Uganda.

Nhaca said part of the money would be loaned to farmers.

"We have signed the $25 million loan deal with Standard Bank and are working on how to operationalize the funds," Nhaca said.

"We hope to get the money in our hands in August and we are going to fund the purchase of quality seeds, fertilizer and plant the land and loan some it to the producers," he said.

Traditionally, banks have been unwilling to lend to small farmers on the basis that they lack adequate collateral, and, as a consequence, farmers are unable to afford the fertilisers, seeds and irrigation equipment that could help raise output.

"We will give them part of the money in the form of soft loans because it is difficult for them to secure bank loans, and they must buy different types of seeds such as maize, wheat and rice and fertilizer to boost agricultural output," Nhaca said.

Mozambique plans to increase its grain harvest by 13 percent in 2009/2010 from 2.6 million tonnes in 2008/09 and cut reliance on food imports.

The agriculture sector has been allocated 10 percent of the country's $4 billion 2009 state budget to help purchase and improve the quality of seeds, as well as to introduce irrigated and mechanized farming.

Agriculture is the backbone of the economy, providing employment for over 75 percent of the workforce.

Labels: AGRICULTURE, MOZAMBIQUE

posted by MrK @ 6:01 PM