ARDA struggles to repay $11m debt

via ARDA struggles to repay $11m debt | The Herald February 9, 2015

The Agricultural Rural Development Authority is failing to repay an $11 million debt as the company is struggling to fully utilise its arable land due to lack of Government support, an audit report by the Office of the Auditor General says.

ARDA used to have more than 36 estates around the country, but they have since been reduced to 20 following the resettlement exercise adopted by the government after the land reform programme.

The parastatal has been a victim of an economic crisis that troubled the country for the past 15 years, but lack of innovation also added to the company’s woes

In an audit report covering the year 2005-10 presented before the Parliament of Zimbabwe, Auditor General Mrs Margaret Chiri said ARDA for the period to 2010 failed to effectively monitor its farming operations owing to different challenges.

“There was evidence of failure to utilise arable land at ARDA Estates. At Doreen’s pride one of the estates had arable land of 270 hectares.

“However an analysis of the 2005-2010 planting season showed that the arable land was not fully utilised,” said Mrs Chiri.

The Authority did not achieve good yield due to late land preparation and planting, poor crop management and inadequate and obsolete irrigation equipment.

The report said all the estates were not able to irrigate more than 50 percent of the arable land.

Farming operations were not timeously undertaken as there were frequent breakdowns of plant and equipment such as tractors, combine harvesters and implements.

Mrs Chiri said ARDA is failing to repair farming equipment and vehicles timeously due to inadequate and unskilled staff and shortage of workshop tools.

The report said the authority is failing to effectively monitor contract farming as management is failing to ensure acquisition of inputs in time which led to reduced acreage and lower yields than budgeted for.

ARDA failed to meet its set targets for the livestock programme of growing the beef herd and producing higher milk yields for the years 2007-2010.

In addition, Mrs Chiri said the authority failed to meet target by an average of 90 percent meaning on average ARDA only managed to achieve 10 percent of their targeted herd size.

The report said ARDA is failing to pay employees salaries and wages and the Auditor General noted that three ARDA estates owed their employees wages and salaries amounting to $65, 016,30.

Unpaid wages included back pay awarded by the National Employment Council in September 2009 and overtime for February 2010.

ARDA management cited lack of inputs, equipment and shortage of skilled labour as causes of underutilization of the land.

The board attributed failure to utilise land to delays in payment by GMB and lack of shareholder support.

Sis an estate with arable land measuring 940 hectares was also failing to fully utilise land.

In 2006-7 only 443 hectares were planted, 207-8 saw 334 hectares being utilised.

In 2008-9 farming was done on 210 hectares and during the 2009-10 seasons the estate only managed to utilise 192 hectares for summer planting which constituted 20 percent of arable land.

The Auditor General however recommended ARDA to specialise in seed production and deal directly with suppliers for the supply of seeds in order for them to successfully resurrect from the wilderness.

“There is need for the authority to draw up and effectively implement a recapitalisation plan for irrigation infrastructure since most of the infrastructure has outlived its lifespan.

“To avoid frequent breakdowns ARDA should adhere to manufacturer’s specifications on maintenance and servicing of plant and equipment,” said Mrs Chiri.

She said ARDA should put in place sound cash flow management systems to avoid liquidity challenges and ballooning wage arrears.