George Chisoko Senior Assistant Editor
I always hear people refer to agriculture as the backbone of the economy and rightly so given the significance of its role in economic development. This means that our economy is agro-based and its survival depends largely on agriculture, at one time contributing the largest chunk to the Gross Domestic Product. It feeds the manufacturing sector and supports many other downstream industries.

It also means that we can measure the economic performance of our country by simply looking at the performance of the agriculture sector. So expecting an agro-based economy, to be out of the woods when agriculture is limping, defies logic. Serious effort needs to be taken, at national policy level, to come up with initiatives that will make our agriculture start to perform to the level where it begins to have a positive impact on economic development.

Our agriculture has failed to perform to expectations because of sanctions imposed by the West in retaliation to land reform. Financial institutions, controlled by Britain and its allies, have not been keen to support agriculture in sympathy with the white farmers that were driven off the land to resettle thousands of hitherto landless Zimbabweans.

Climate change, which cause drought and other adverse weather conditions, has not spared our agriculture.

So, what we have are enthusiastic farmers with the land and the labour in abundance but without access to cheap finance to turn the vast tracts of land in greenbelts of crops.

Now in its current state, where financing is constrained by stringent bank loan requirements, and the high cost of money, inadequate budget allocation and drought, agriculture can easily be referred to “as the back without a bone of the economy”, it has ceased to be the backbone of the economy.

Government has tried to raise agriculture to the level it becomes the backbone of the economy by availing crop inputs through various schemes but on its own it can only go as far as it has to deal with other pressing national commitments. Funding remains the most important missing link in the agricultural production matrix.

Although there are other factors like electricity and irrigation that cannot be discounted when we talk about the success of agriculture, the thrust of this discussion is to focus on funding and proffer ideas on the way forward to turnaround the agricultural sector.

First of all, we need to acknowledge the significant role of small-scale and communal farmers, who I want to refer as “the backbone of agriculture” in that these, unlike most A2 farmers, stay on the land and their livelihood is entirely dependent on farming. They have no other means of earning a living and so these are the people we should be mobilising resources for.

They have a track record of having contributed 80 percent of maize produced in the country and 70 percent of cotton during the period the commercial farming sector was dominated by white farmers. Banks should seriously consider lending to A1, small-scale and communal farmers at very concessionary rates. The issue of collateral remains a matter of great concern but in as much as it is important, some relaxation on the collateral requirements can be made.

Banks can ask these farmers, the majority of whom do not have urban houses to put up as security, to offer their cattle, chickens, goats, scotchcarts, ploughs and planters as collateral. Given good rains the banks are assured of loan repayments because they will be dealing with proven farmers that are on the land full time. These farmers have so much attachment to their property to the extent that they will work hard for the loan to preserve and protect their property from being attached by banks.

We must bear in mind that these farmers have smaller hectarages of land that would not require the banks to lend astronomic amounts. They can even consider a group loan system where they borrow as a group and spread the risk. Because small-scale farmers survive entirely on farming, they can easily push each other to the limit to produce and make repayment.

That they have a good record of paying back was confirmed a few days ago by a friend who does consultancy for some micro lending firms which registered a 95 percent repayment rate. So I am calling for the banks to make the $1 billion agriculture facility accessible to small-scale and communal farmers on terms I have outlined above.

The case is different for A2 or commercial farmers who I think should provide collateral to get the loans. Remember, this is depositors money and it needs to be protected. There has been noise in some quarters that banks’ stringent requirements were working against land reform. I beg to differ. The banks have demanded collateral in the form of immovable property like houses. They have also asked for evidence of produce stocked in warehouses. Fair enough!

We have always said farming is a business and I know businesses borrow money from banks for capital and operational expenditure. If A2 farmers look at farming as a business, then they should not hesitate to satisfy the loan requirements of banks.

Why are they afraid to put up title deeds for their houses if they are committed to the business of farming? People borrow, produce and pay back, that is the way of a business and farming is no different. The argument should not be on the lending terms but rather on getting the money at concessionary rates. Real farmers show confidence in what they do and when opportunity to borrow money from banks arises, they are the first ones to grab it without looking too much into the lending requirements. True farmers do not quack just at the mention of collateral. This reminds me of William Shakespeare, in Macbeth when he talked of the importance of grabbing opportunities when they are presented. He said, “There is a tide in the affairs of men, if taken at the flood will lead to fortune . . . omitted all the voyages of life will lead to misery”, or something to that effect and I guess this applies to our farmers. Gone are the days when they depended on free inputs; now is the time to grab opportunities that are presented and work towards meeting the loan requirements.

There is never any harm in farmers booking appointments with bank managers to discuss the requirements, you never know, a common ground can be reached that is beneficial to both parties. There are certain things that we must do because of our “Zimbabweness” and I expect to see banks, regardless of their ownership structures, coming to the party by relaxing their requirements so that the majority of farmers can access the facility.

I, however, totally disagree with those likening banks with opponents of land reform. One billion dollars is no small money and any farmer meeting the lending requirements should be able to access the facility.

It is only those that do not take farming as a business that quickly want to put a political spin to the requirements when they are there to safeguard depositors money.

What I would call for now is for the banks to have a re-look at their interest charges with a view to lowering them for the purposes of financing agriculture. Honestly, high interest rates of between 20 to 30 percent per annum would not help the situation but single digit interest rates would spur agricultural and economic turnaround.

As the banks get down to revising their interest rates, I also implore them to consider accepting, as collateral, things like tractors, combine harvesters, grinding mills, irrigation equipment, planters, ploughs, boom sprayers, motorbikes and any other farm equipment, especially for those farmers who cannot provide house title deeds. Not every person who got land has a house and that should be taken into consideration.

All these efforts should help put bone to the back of the economy and thus return agriculture to its status as the backbone of the economy. I rest my case for now.