Farmers should graduate from subsistence agriculture to formal business models that can be supported with bank loans and training, Reserve Bank of Zimbabwe governor Dr John Mangudya has said.

This, he said, would increase productivity and spur economic growth.

The central bank chief also underscored the importance of allocating resources to productive farmers, instead of rolling out wholesale support.

In his latest market update, Dr Mangudya said, “… it is, therefore, necessary that after implementation of the Fast Track Land Reform by Government, the next step should be to restore and preserve productivity on the farms in order to create real wealth and jobs.

“This should be done by capacitating farmers through the extension of affordable credit, training, technical expertise as well as assessing the number of productive and unproductive farms for efficient allocation of scarce resources.”

He continued: “Farming is a business; it is time the nation put in place measures that move farmers out of subsistence practices and have them operate as formal business entities. This should be done by decisively addressing some of the challenges that continue to collectively stifle the performance of agriculture.

“Chief among these challenges are lack of access to affordable finance, insatiable appetite to occupy land at the expense of production, and poor supporting infrastructure for the majority of farmers.

“Addressing these challenges by Government and the financial institutions would transform farming, both small and large, into viable business for the benefit of the economy and ensure food security.”

Dr Mangudya said authorities were finalising land reforms and creating financing mechanisms for beneficiaries.

“Bringing finality to the Land Reform Programme would go a long way in addressing uncertainties that continue to adversely affect this sector from achieving its potential in transforming the economy.

“The urgent resolution on the bankability of 99-year leases will enable active participation of the financial institutions in agricultural development. Complete mapping of newly-created farming units to control boundary disputes distract farmers from productive use of their time (will also help).

“The Ministry of Lands has already begun using a new system which relies on modern GPS to map A1 and A2 plot layouts. This is highly commendable as it enhances security of tenure of both A1 and A2 farmers.

“When agriculture is managed with modern production technologies and appropriate input and output markets, it is transformative and it wipes out poverty and overhauls entire rural economies.”