LIVINGSTONE MARUFU
Government is reviewing the National Enhanced Agriculture Productivity Scheme (NEAPS) after the financing scheme faced several challenges, Finance and Economic Development Minister, Mthuli Ncube has said.
NEAPS is a financing model created by the government in partnership with banks.
But, the scheme faced serious challenges. One of the biggest problems was that farmers have been reluctant to deliver their grain toGrain Marketing Board (GMB) due to low prices.
This meant that NEAPS was hit by low recovery rates.
Under this partnership, banks recover their money through government guarantees thereby putting pressure on the fiscus to repay banks that would have used their money to finance the farmers.
“The low recovery rate has necessitated the government to explore options which ensure the sustainability of agriculture financing, including crowding in private sector investment in agriculture and adopting a competitive grain pricing and purchasing model,” Ncube said.
He added: “Funding for commercial farmers under the NEAPS is being reviewed following the challenges experienced since the inception of the programme which includes side marketing by farmers, reluctance by farmers to deliverer their produce to GMB citing low grain prices being offered by GMB and delivery of grain by farmers using different names making it difficult for the stop order system to recover loans.”
Last year, the recovery rate was below 40% and this year the number is said to be much lower due to very low producer prices.
Contacted to comment on the matter, the Zimbabwe National Farmers Union chairman Stewart Mubonderi said: “There is a need for the government to relook at its pricing regime to help the farmers to break even. As it stands the current prices do not allow the farmers to go back to the field, to repair implements they used, to feed the family and make profits.”
He added: “Without doing that farmers will continue diverting the produce to ensure their families get something out of it. Apart from that productivity levels will remain low.”
Mubonderi said this has resulted in very few farmers partaking in the scheme as many still have debts.
“I am against the notion that the country will have a bumper harvest this year as very few farmers will access loans due to stringent conditions to access loans, high input prices, unpredictable weather patterns and low producer prices which don’t encourage farmers to grow,” Mubonderi said.
This comes as the government has issued a US$154.6m equivalent local currency guarantee to AFC Holdings to raise resources from the market in support of the agriculture sector for the 2022/23 summer farming season.
The mobilised funds will be used to finance the production of maize, soya beans, sunflower and traditional grains.
AFC Holdings has been capacitated with tractors and implements which are being leased to farmers on a cost recovery basis.
Government has also partnered CBZ Agro Yield to finance the 2022/2023 summer cropping season through payment of farmer commitments under the facility.
