Call to climate proof agriculture
Zimbabwe’s agricultural sector heavily relies on rainfall for crop production, making it severely vulnerable to the adverse impacts of El Niño-induced low rainfall seasons.
Most farmers are supported by different financial institutions, companies and governments through different input support programmes; hence, both parties’ farmers and financiers are at the mercy of the 2023–24 El Niño-induced drought.
While the financiers believe they have climate-proof strategies and are eager to continue financing agriculture in the coming seasons, the farmers are not certain of the next move, appealing for write-offs and continued Government support.
Commercial Farmers Union (CFU) president, Shadreck Makombe, told Business Weekly the declaration of disaster by the Government is good for farmers because it means there is now a need for mitigation, and even funders should try to recycle if it was or write off some of these loans.
“We were the most hit and affected by this El Niño in every crop being rain fed or irrigation because when the water tables are low, you cannot irrigate.
“Farmers are incapacitated and given the situation, farmers have invested heavily because what they know is farming on commercial land and farming as a business.
“Given the whole situation, we are looking at the whole fabric to assist the farmer; input prices should not be high and discounts should be the norm if we want our economy to tick,” he said.
Zimbabwe declared an El Niño-linked drought disaster, appealing for US$2 billion to help secure food security.
Rains failed across 80 percent of the country, and this year’s grain harvest is expected to be well short of needs.
Insufficient rainfall and prolonged dry spells negatively affect crop yields, resulting in lower productivity and compromised food security.
Crops such as maize, a staple in Zimbabwe, are particularly susceptible to drought stress, reducing yields and causing potential crop failures.
But Makombe said insurance could have minimised the impact of the El Niño on the farmer; hence, engagements should continue.
“We are trying to push on insurance to find some suitable insurance packages because some of these insurance schemes are in favour of insurance companies who are just bent on milking the farmers.
“If there are genuine insurance companies, the farmers are ready to engage, but you find that where farmers had tried to insure, it was a hurdle for them to recover or get the money.
“Most farmers are disheartened, but let’s continue to engage; insurance is the best cover in scenarios like El Niño,” he said.
CBZ Bank has been financing agriculture through bond instruments, financing the procurement of farming equipment and inputs for maize and soya bean.
Lawrence Nyazema, the group’s chief executive, said CBZ has mostly financed farmers with irrigation facilities and, over the past few years, has been capacitating farmers through mechanisation and irrigation schemes, which have assisted in climate-proofing parts of agriculture as well as enhancing productivity.
“There was reduced demand for funding from dryland farmers who were aware of the weather forecast, which predicted a drought.
“But it is critical for financial institutions to continue supporting agriculture so that we achieve food self-sufficiency and adequate production of raw materials,” he said.
Nyazema added that the insurance sector should enhance the availability of insurance products that deal with climate change risks.
Seed Co, a leading seed producer, recently said it was investing more in drought-tolerant maize seed varieties to mitigate the effects of climate change.
Climate change is making droughts more frequent and severe globally, threatening food security, and Seed Co. has a breeding programme for developing early-maturing seed varieties that will counter the effects of drought.
In 2020, Zimbabwe also launched a US$47 million seven-year project with the support of the Green Climate Fund and the United Nations Development Programme, aimed at strengthening the climate resilience of vulnerable communities.
Programmes such as Pfumvudza/Intwasa have increased resilience against climate change-induced drought impacts and improved yields in rural communities in Zimbabwe, where they have been implemented.
AFC Land and Development Bank, a subsidiary of AFC Holdings, has also been a key player in supporting the summer cropping season, where strategic crops such as maize, wheat, soya beans, and small grains were financed to ensure food security and self-sufficiency.
Other agricultural sectors funded include livestock, plantations, fisheries, and horticulture, and the bank also plays a role in offering mechanisation facilities to qualifying farmers.
“The Land Bank will continue supporting all categories of farmers as it contributes towards attaining food security and self-sufficiency for the country.
“The AFC Land and Development Bank strives to provide funding that is low-cost and adequately tenured,” group chief executive Francis Macheka said in the group’s financials.
The bank is present in the country’s ten provinces and will continue to expand to the districts as it increases its footprint across the country.
Agriculture expert, Dr Renneth Mano, recently said that due to the high cost of farming inputs and elevated climate change risks, farmers must take the seasonal climate risk of drought-induced crop failure as a very important cost of production when projecting their expected profit per dollar spent on a crop.-ebusinessweekly
