Commercial Farmers' Union of Zimbabwe

Commercial Farmers' Union of Zimbabwe

***The views expressed in the articles published on this website DO NOT necessarily express the views of the Commercial Farmers' Union.***

Biti tells govt to give farmers long leases

Biti tells govt to give farmers long leases

Saturday, 15 October 2011 16:10


FINANCE minister Tendai Biti says there is need for long leases that can be 
used by farmers to borrow from the banks among a host of recommendations 
designed to make agriculture a viable business. This, according to Biti, 
will allow farmers to go directly to the banks after government has realised 
that budgetary support alone is not the solution to the problems facing the 
agriculture sector.

“Wherever I have gone, farmers are crying about the absence of collateral 
and you can’t have collateral without securitised long leases,” he said.
“The Attorney General has completed the work and it’s now up to 
(Agriculture, Mechanisation and Irrigation Development) minister (Joseph) 
Made and Minister Murerwa (Herbert). It’s important that security of tenure 
and collateral is there because farming is a business and every farmer must 
have a business model,” Biti said.

“Nowhere in the world does government support agriculture. it can come with 
a few subsidies here and there and can look at its vulnerable sectors, but 
government can’t look after agriculture.

“Long leases will allow the return of a land market in Zimbabwe. there isn’t 
a land market and if you can’t trade in land, it becomes dead capital. A 
commodity needs two issues: use value and exchange value. So far our farms 
have use value, but no exchange value.”

The Bankers Association of Zimbabwe (Baz) recently said they want lenders to 
be given the same rights as the government in the ownership of land to 
resolve the issue of collateral.

Banks argue that by having the same rights as the borrowers, they can 
recover the debts.
Government has amended some clauses to the 99-year leases to entice banks to 
accept them as security.

Baz said Clause 17.1.1 states that the lessee cannot cede, assign, 
hypothecate or enter into a working partnership without the authority of the 
lessor and that the lessor has six months to respond, which does not work 
for debt recovery.

Biti said with liberalisation measures instituted by government in 2009, 
prices should be determined at the floors like what happened at tobacco and 
cotton auctions.

“This year the price of maize was US$285 per tonne, but in a liberalised 
environment government should leave that role to a commodity exchange and 
the ministries of Agriculture and Industry have put a grain commodity 
exchange,” he said.

“Once you have a producer price, a floor price that is not equal or 
consistent with import parity, you have got a problem. Our price this year 
was US$285 per tonne, but people are bringing maize from Malawi and Zambia 
at US$190 per tonne.”

Biti said the Grain Marketing Board (GMB) will only buy grain for strategic 
reserves. GMB used to have a monopoly on the marketing of grains, but that 
stopped in 2009.

The absence of a commodity exchange means that farmers are not getting value 
for their produce.

The GMB has been failing to pay for grain delivered and is offering some 
farmers inputs instead of cash as payment for their produce.
Zimbabwe does not have an operating commodity exchange. A commodity exchange 
launched in January is still to take off nine months on.
Biti promised to ensure that the exchange is kept running to ensure fairness 
in prices.

Over the years, farmers have waited for government support as they cannot 
access the financing from financial institutions.
In addition to that, the GMB has been unable to pay for deliveries to the 


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