Sunday, 19 January 2014 00:00
Itai Mazire
The Government has begun refining the 99-year lease agreements issued to beneficiaries of the land reform programme to enable the farmers to access funding from financial institutions.
Under the present set-up, the beneficiaries cannot secure bank loans for production as the documents cannot be used as collateral.
It is understood the Ministry of Lands and Rural Resettlement is already working on a new framework which will soon be presented to Cabinet for scrutiny. Ministry officials are also expected to meet Bankers’ Association of Zimbabwe (BAZ) representatives this week to discuss the proposals.
In an interview last week, the Minister of Lands and Rural Resettlement, Dr Douglas Mombeshora, said authorities want to ensure farmers secure loans before the next winter and summer cropping seasons.
“We noted in the media that while responding to criticism from legislators during a post-budget seminar last week, the BAZ president, Mr George Guvamatanga, said money held by banks belonged to depositors and it would not be prudent for them to lend it to farmers based on the 99-year lease.
“As a ministry, we immediately wrote to Mr Guvamatanga on Wednesday so that we could meet and craft an agreeable document that would see banks give farmers loans since agriculture is a key driver of the economy.
“After noting that there was no response from BAZ since then, we have since communicated with them through the ministry’s permanent secretary that we meet this week. “The whole process involves sitting with them and coming up with a security-based document that will see the farmer go to the bank and secure funding for his or her farming activities.”
Dr Mombeshora said there was need for banks and farmers to collaborate as agriculture underpins the country’s economy.
“It is not about us, as Government, giving farmers title deeds so that they secure loans from financial institutions. The matter is about us, as a ministry and BAZ, meeting to come up with a document that will see farmers get funding.
“We understand their position that some farmers will default on loan repayment, but there is now need for them (banks) to understand that Zimbabwe is an agro-based economy that also needs support from financial institutions.
“The ministry is working on the modalities for a security-based lease document that will give banks trust and at the same time see farmers benefiting. BAZ has since indicated that they are willing to accept proposals with regards to farmers securing loans.
“It is a matter of giving banks security, and this security will be in the lease agreements. Government will not give farmers title deeds since this was rejected during the constitutional referendum. We need to deal with this stalemate between farmers and banks.”
Zimbabwe Farmers’ Union second vice-resident Mr Berean Mukwende said the initiative would help address the farmers’ plight. He said Government should ensure refining the lease agreements was mutually beneficial.
“Communal farmers form the majority which is really suffering because they are not accessing any loans from banks. There is need for banks to trust farmers. The farmers should also be able to pay back loans on time. “We are depositors in these banks, hence there is need for them to allow us to secure loans like any other individual in Zimbabwe.”
Last week, legislators attending a post-budget seminar in Harare raised concern over farmers’ failure to secure bank funding. They argued that the situation continued to inhibit production.
Responding to the complaints, Mr Guvamatanga said BAZ was open to discuss the matter with stakeholders with a view to finding solutions.
“At the end of the day, banks will take their money where they are likely to be paid back, where there are proper structures. Unfortunately, the proper structures at the moment are only in tobacco,” he said.
Labels: 2008 BUDGET, LAND RIGHTS
posted by MrK @ 7:31 PM
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