Livingstone Marufu
FARMERS want Government to direct banks to reduce lending rates for farming to become a viable venture and ensure food security. Planning has already begun for the next summer cropping season and farmers say until the cost of borrowing is pegged at “reasonable” levels, the agriculture sector will remain subdued. Government has made it mandatory for banks to set aside 20 percent of loan portfolios for agriculture, but uptake of the funds remains low because of inhibitive costs and requirements such as collateral.

Zimbabwe Commercial Farmers Union president Mr Wonder Chabikwa said: “We call upon banks to reduce their interest rates to about six percent from 18 percent … If they could reduce to six percent, many people will be able to repay. At this juncture, we clearly know that Government is not in a position to subsidise agriculture, but it can intervene to ensure the lending rates are reasonable.”

Mr Chabikwa said banks had set aside about US$1 billion for agri-loans, but few farmers could acccess this because of high interest rates. Reserve Bank of Zimbabwe Governor Dr John Mangudya said financial institutions should formulate innovative and sustainable products for smallholder and rural farmers.

“In order to ensure the country’s self-sufficiency and food security and to boost exports, banking institutions should prioritise lending for production of maize, cotton, tobacco and horticulture,” he said.

Since Government embarked on the Fast-Track Land Reform Programme in 2000, financial institutions have been reluctant to fund indigenous farmers, though they previously poured in millions annually for white farmers.