Agribank restructuring excites farmers

FARMER organisations are excited by plans to remodel Agribank and expect the move to enhance the banking institution’s impact by loosening funding bottlenecks for the sector.

The Government is seized with the restructuring exercise, which will see the state-owned bank being transformed into a Land Bank that would propel production through increased support for the country’s Agriculture and Food Systems Transformation Strategy.

Lands, Agriculture, Fisheries, Water and Rural Resettlement Minister Dr Anxious Masuka has said that the process to turn Agribank to a Land Bank was ongoing, with high expectations it would be concluded next month.

The new bank is expected to bring in financial aid specifically for the agro-industry and also be of help to small holder farmers who produce most of the food consumed locally.

In the past 20 years, there has been no meaningful investment support for farmers by banking institutions, with commercial banks shutting the door on small holder farmers and even emerging commercial growers.

In what is also anticipated to be a game changer in agriculture, the proposed Land Bank will put the agriculture industry at the core of economic recovery and growth, building a US$8,2 billion economy by 2025.

Farmers across board also want financial aid to kick-start projects. They view the Land Bank as the solution, according to Mr Winston Babbage the Zimbabwe Commercial Farmers’ Union vice-president.

“This is absolutely a brilliant move by the Government,” said Mr Babbage.

“Now the farmers will be able to walk into the bank and come out smiling as far as financing of farming projects is concerned. Our farmers have the ideas to bring back agriculture, what was lacking is financial support.

“We believe that with proper management and engagement, this Land Bank will change the agriculture sector.”

Mr Babbage said historically, farming in Zimbabwe was supported by banks, which made it easy for farmers to attain surplus.

“Remember that even way back, the reason why we once were the envy of the world was because farmers did well with viable financial support. A well-resourced farmer produces more and the country benefits as well,” he said.

Mr Babbage said the remodelling of Agribank was also well timed as the country anticipates a bumper harvest out of this summer cropping season.

“It means that farmers will find it handy to seek investments and financial inclusion. With capital injection, the country will bounce back to its glory days,” he said.

Mr Land Ndebele, chairman of the flourishing Somnene Irrigation Scheme in Bulilima district said if the Government commits to supporting farmers financially, the agriculture landscape will change for the better.

“As far as agro-financing is concerned, as a country we are still a long way. But, we appreciate the commitment so far to turn the bank into what will be of benefit to many,” said Mr Ndebele.

Banks have come under fire for failing to support farmers, in particular small land holders who make up close to 90 percent of the sector. Largely, the financial institutions did not have faith in helping the farmers with capital. Most of these farmers only have the land and no other collateral to claim loans for assistance.

In a recent interview, Permanent Secretary in the Ministry of Lands, Agriculture, Water and Rural Resettlement Dr John Basera said the remodeling of the bank was set to support the generality of farming development.

“More is expected for the benefit of the whole agriculture industry,” he said.

The conversion of Agribank was considered and approved by Cabinet in August last year, when it was brought out that the banking institution was crucial to the economy and national food security.

The Government has said that the remodelling of Agribank entails establishment of vibrant and diversified rural financial services, which are underwritten by a Land Bank or its equivalent.

Experts in the sector are confident that the remodelling will strengthen and diversify existing agricultural and rural financial services for sustainable agrarian reform for accelerated development.-chronicle.cl.zw