Food security risk as farmers reel in debt

May 31, 2016 in Business

EIGHTY percent of farmers in Zimbabwe are heavily indebted and are failing to settle debts due to liquidity challenges, a situation likely to affect production, NewsDay has established.

BY MTHANDAZO NYONI

Zimbabwe Commercial Farmers Union president, Wonder Chabikwa said, in an interview yesterday, that many farmers, who borrow through various means, were left heavily indebted and were unable to continue farming.

“Since we dollarised in 2009, farmers’ borrowings were very high, up to 25%,” he said.

“Before dollarisation, we had some subsidies in place, like for electricity and water, but those subsidies have been removed. Since then, the cost of production became very high and farmers started accumulating debts and now they are heavily indebted.”

Chabikwa said the situation was so dire that some farmers were considering quitting farming.

“Farmers are no longer motivated even though they want to perform a service to the nation. Many of them are making losses and the situation is very bad,” he added.

Due to debts, Chabikwa said farmers’ properties, including farming equipment were being auctioned on a daily basis.

He said if the situation remained unresolved, the country’s food security would be heavily affected.

“We are expecting a good season according to the Meteorological Department, but we are afraid that we are not going to be able to take advantage of it. We are asking for debt relief so that farmers get a sigh of relief and start producing,” he said.

Despite agriculture being the cornerstone of the economy, farmers have in the past seasons failed to obtain affordable financial resources to boost operations.