Smallholder farmers have received a huge boost following the decision by Cabinet to reconfigure Agribank so that it provides short, medium and long term financing packages as Government moves to enhance productivity.
The decision will add impetus to the attainment of Vision 2030, while the issue of land tenure will not be a problem since Government owns both the land and the bank.
Under the deal, now being concretised by Treasury, the Attorney-General’s Office, the Ministry of Lands, Agriculture, Water and Rural Resettlement and the RBZ, Agribank will become a land bank modelled along the defunct Agricultural Finance Corporation.
This was said by Information, Publicity and Broadcasting Services Minister Monica Mutsvangwa during a post-Cabinet media briefing yesterday.
“Cabinet noted that the establishment of vibrant and diversified rural financial services which are underwritten by a Land Bank or its equivalent will be an important step which the country should take in order to move towards upper middle income status. This is in view of the realisation that smallholder farmers comprising Communal, Old Resettlement, Small-Scale Commercial and A1 farmers constitute 99 percent of the farming population, holding up to 95 percent of the productive land and owning over 90 percent of the national livestock herd,” said Minister Mutsvangwa.
“The bank will also provide investment support for A1, A2 and small-scale commercial farmers (matenganyika), who have not been supported by commercial banks.
“It will link currently under-utilised land to structured markets and established value chains supplying factories, supermarkets and export markets and also provide working capital for the construction of agricultural infrastructure as well as for value addition and beneficiation enterprises.”
She said the bank will mobilise private sector finance in order to contribute to job creation, food security and social protection in rural communities.
Responding to enquiries, Finance and Economic Development Minister Prof Mthuli Ncube said the provision of loans will not be affected by the absence of 99-year leases.
“The 99-year lease is not a problem, but is actually a solution. Government owns the bank and the land so there is no collateral risk arising from any difficult with 99-year leases,” said Prof Ncube.