99-YEAR BANKABLE LEASES ON THE CARDS
Chronicle Reporter/Harare Bureau
11 December 2012
A revised, bankable 99-year lease is ready and is expected to be discussed in Cabinet before the end of this month, the ZanuPF Central Committee Report issued last week says.
The Government has for some time been working on a more bankable lease document after it emerged that the existing one cannot be used to support applications for the much-needed loans from financial institutions.
The Central Committee report however said their is a challenge of making the 99-year lease bankable, at the same time ensuring that it is not used by financial institutions to reverse the land reform programme. The report outlines progress that has been made so far in issuance of 99-year leases to A2 farmers as well as processing of offer letters to new beneficiaries of the land reform programme.
“This year,” the report says, “a total of 1310 offer letters were processed for model A2 beneficiaries countrywide. A total of 48, 99-year leased for model A2 farmers have been issued this year. Registration has been completed on 28 of them this year. The revised, bankable 99-year lease is ready and will be submitted to Cabinet before the end of the year. The challenge is how to make the lease collateral-friendly without turning the lease into a document that may facilitate the reversal of the gains of the land reform programme.”
According to the report, provinces have submitted provisional lists of 287 white farmers who have been recommended to remain on their properties. Mashonaland East recommended the highest number of farmers at 80, followed by Matabeleland South at 43 and Mashonaland West and Midlands both at 36. Manicaland has recommended 30, Mashonaland Central 25, Matabeleland North 21 and Masvingo 16.
On ungazetted white-held farms, the report says there are 198 properties countrywide. In Manicaland province the properties are mainly holiday homes which are not arable.
The report says the success of the land reform programme was being hampered by power cuts, disputes in some areas, recurring droughts, expensive and lack of inputs, low producer prices and failure by the Grain Marketing Board to pay for grain deliveries on time. It is essential, the report says, for the Government to find lasting solutions to the challenges holding back the success of the revolutionary scheme.
“Notable disputes range from boundary disputes due to shifting of pegs, water disputes due to sharing of irrigated water, equipment disputes as a result of sharing equipment and other infrastructure such as water pumps and tobacco barns. It is pleasing to note that the Ministry of Lands and Rural Resettlement has formed a Dispute Resolution Committee comprising ministry officials and members of the national Land Inspectorate to resolve disputes in resettlement areas. The committee has attended to 141 land disputes with the majority revolving around boundary and shared infrastructure,” the report says.
On access to funding, the Central Committee report says the sector needs more than $2 billion per year to operate optimally. However, farmers are failing to access funding because they lack collateral while some of the few who obtain loans fail to pay back. The party urges Government to play a more prominent role in facilitating increased and more flexible funding for farmers.
Meanwhile more than $2 billion is required annually to revive the agricultural sector, which Treasury is reluctant to bankroll.
According to the report, inadequate funding was crippling efforts to revive the sector.
“The agriculture sector is suffering from inadequate funding and the department is suggesting that a solution to revive the sector should be centred on unlocking financial resources. The sector needs more than $2 billion per year to operate optimally and bring back the lost glory,” reads the report.
The department noted that farmers were failing to access loans from banks as they did not have collateral.
“In some cases, farmers borrow money but fail to pay back the loans in time due to droughts but the banks need their money back. Farmers would need sustainable financial support from the banks without stringent conditions,” the department noted.
It encouraged Government to play a key role in facilitating funding for farmers like what used to happen during the colonial period when commercial farmers were bankrolled by the State.
The department bemoaned the prohibitive cost of farming inputs.
“Most farmers are struggling to put their land to full production because of the prohibitive costs of inputs such as seed, chemicals, fuel and tillage. Agriculture production costs are generally high in our country due to high costs of fertiliser, chemicals, labour, fuel and water.
“This is also combined with the high cost of funds on the market. Again these have a negative effect on the overall operations of farming. This resulted in most farmers failing to make a profit or even, thus rendering farming a useless business venture.”
The department urged Government to come up with good pricing for agricultural inputs to encourage farmers to buy hybrid seed that yields more.
The department said the distribution of inputs for the 2011 – 2012 farming season was not done properly.
“It left a lot of people grumbling after they failed to access the inputs. I was sad to note that some of our leaders were involved in the looting on the inputs at the expense of our ordinary people who do not even have the capacity to purchase the expensive inputs on the market.
“The department wishes to see transparency in the distribution of the inputs with the involvement of party structures.”
The department said the late distribution of inputs, which had become a tendency, contributed to poor and low yields.
It, however, noted that the land reform exercise embarked on by ZanuPF to address the historical land ownership imbalances had brought a lot of economic benefit to Zimbabwe.
“Our people are now on land and are committed to optimum production and productivity. The party and Government need to continue supporting interventions for us to realise maximum production and productivity from the land,” the department said.