bo ZIMBABWE: No collateral, no inputs, then no food
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Author Topic: ZIMBABWE: No collateral, no inputs, then no food  (Read 1401 times)

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HARARE, 16 October 2009 (IRIN) - The planting season in Zimbabwe is fast approaching, but farmers are struggling to access crucial agricultural inputs, bringing fears of yet another poor harvest.

"Before the government of national unity came into being [in February 2009] ... new farmers would receive fuel, fertilizer, seed and implements at almost giveaway prices, and sometimes for free," said Thomas Chirandu, a large-scale farmer in Mashonaland West Province who had prepared his land but could not afford to buy maize seed and fertilizer.

Chirandu, a beneficiary of Zimbabwe's controversial land reform programme, said that without "urgent assistance" from the government, most newly settled commercial farmers would not be able to grow food for the country.

President Robert Mugabe launched the fast-track land reform programme in 2000 to redistribute white-owned commercial farms to landless blacks; instead it brought steep economic decline, disastrous food shortages and political violence, with widespread allegations that the redistribution process was a smokescreen for land grabs by members of Mugabe's ruling ZANU-PF elite.

"We are being left to fend for ourselves, and if there is no urgent and immediate rescue package, there could be even more serious food shortages next year," Chirandu warned. In 2008 and part of 2009 more than half of Zimbabwe's estimated 11 million people were receiving food aid.

Land collateral

Agricultural inputs worth US$210 million, imported from South Africa, are available to commercial farmers, but at a price. The government had suggested that farmers borrow from commercial banks, using their land as collateral.

In fact, the government has retained ownership of all land confiscated under the reform programme, and instead of title deeds newly settled farmers are given "offer letters" or 99-year leases, which banks are unwilling to accept as collateral.

John Mangudya, who works at one of the largest commercial banks in Zimbabwe, said the offer letters and 99-year leases could not be used as collateral because they were not transferable to third parties, whereas "loans are bilateral arrangements between the bank and its customer." If the farmer defaulted on the loan, the bank would have no claim on either the lease or the land to settle the debt.

No takers

Meanwhile, thousands of tonnes of unaffordable seed and fertiliser have been lying at the depots of the Grain Marketing Board (GMB), a parastatal monopoly, so last week the government came up with another plan.

Joseph Made, the minister of agriculture, mechanisation and irrigation development, said farmers could now access seed and fertilizer by trading in undelivered grain and soya beans from the previous cropping season.

"We are fully aware that farmers may not have money for input procurement, but this facility [exchanging commodities for inputs] will allow them to procure inputs on time," he told the state-run newspaper, The Herald.
Under this arrangement, farmers would deliver their produce to the GMB and get a receipt reflecting the value of their commodities; the receipt could then be exchanged at commercial banks for a voucher to collect inputs.

A senior banker, speaking on condition that he was not named, was quick to dismiss the concept. "That arrangement is better left to the GMB to exchange grain for inputs. Banks may find the programme too cumbersome to implement ... The only feasible idea would be to provide 'realistic' collateral."

Muriel Zemura, spokesperson for the GMB, commented: "It is too early to say how the programme has been received by farmers. However, it must be a welcome development for farmers who were having problems accessing inputs."

However, Renson Gasela, the secretary for agriculture in the opposition Movement for Democratic Change, an agricultural expert who headed the GMB when Zimbabwe enjoyed food security in the 1980s, described the scheme as "a crazy stunt".

"There can't be many farmers out there who are still holding onto any maize grain or soya beans. The truth of the matter is that this process should have started in April," he said.

"It is always the same story every year: that we are never adequately prepared, as if we don't know that there is an agricultural season coming." Gasela predicted another bleak agricultural year, with the inputs likely to lie uncollected and rot.



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