Farmers must become self-reliant

The Herald (07/10/09)

YESTERDAY’S announcement by the Reserve Bank of Zimbabwe that it is unable to offer direct financial support to farmers has come as a major blow to many farmers who were pinning their hopes on the central bank for support.

Many farmers had dangerously become used to receiving inputs assistance from the RBZ when it was involved in quasi-fiscal activities.

With the central bank now concentrating on its core business, many farmers have thus been left in limbo, unsure of where to turn to for agricultural support.

As a result, they have continued flooding the RBZ with inquiries about its farmer support schemes for this year’s summer cropping season.

We believe farmers needed to be educated on where to turn to for help in the absence of the RBZ they had become accustomed to.

There are other institutions like Agribank that should fill the gap thus created.

Nobody can deny that far too many of our farmers have become heavily dependent on handouts, especially from the Government.

Yet farming, like any other venture, should be taken as a business and to be successful one needs to invest and not live on handouts.

Inasmuch as it hurts, we believe, strongly for that matter, that the days of handouts are over and farmers should approach banks for loans to finance their cropping programmes. Once a farmer meets the loan requirements, we do not think banks should have any problems giving money for the purposes of buying inputs, such a s fertilizer, seed and chemicals.

We believe that the illegal parallel market for crop inputs flourished simply because some farmers were getting free inputs, especially under the GMB Input Scheme, and ended up selling them instead of planting.

Now, the loan route that the Government has adopted will obviously separate genuine farmers from the fly-by-night ones.

For anyone to apply for loan means seriousness and surely only genuine farmers would apply.

The inputs they are going to get will no doubt be planted so that they are able to repay the loans.

Having said this, we want to urge banks to also consider farm assets as collateral.

We have heard reports that banks are insisting on title deeds, which the majority of farmers do not have.

Yet we know that many farmers own tractors, combine harvesters, planters, disc harrows and other farming equipment which can be used as collateral.

Obviously, a farmer with such an array of equipment cannot fail to produce and consequently repay the loan advanced to him/her. These are some of the things that banks should seriously consider because we do not want to see farmers with equipment failing to plant.

Of course, banks need to carry out their due diligence exercise to ascertain the ability of the farmer to repay.

Some may not have the title deeds yet they have capacity to produce if given the inputs and be able to repay the loans. Let not the banks tie down farmers on title deeds.

We also want to urge farmers to invest wisely money accruing from sales of produce. Profits should be ploughed back into farming and not spent on luxuries.

In the absence of title deeds, we believe farmers can also produce on contract.

There are a number of reputable companies willing to enter into contract growing and we believe farmers should not hesitate to grab such opportunities.

The contract farming system has been highly successful in countries like Brazil where smallholder farmers, with land holdings averaging 2,5 hectares each, have turned Brazil into the world’s largest flue-cured tobacco producer.

Farmers can never go wrong with contract farming as they are assured of inputs and all the necessary support.

The only problem comes when farmers, unhappy with the prices, side-market the crop. But this is a problem that the parties to the contract can always resolve amicably