Farmers moving into ‘loans vicious circle’

Source: Farmers moving into ‘loans vicious circle’ | The Herald January 14, 2020

Farmers moving into ‘loans vicious circle’

The Sunday Mail, December 27, 1987

FINANCIAL institutions financing farmers in purchases of agricultural inputs must re-examine their objectives and indicate whether their aim is to make farmers self-sufficient or to make them forever dependent on the institutions.

This was said by the president of the National Farmers’ Association of Zimbabwe, Cde Robinson Gapare, when he presented a paper on the Rural Problems and the Role of Investment at a conference in Brasilia, Brazil, last week.

Cde Gapare said finance houses must, together with farmers, look at the broad factors which affect the effective utilisation of agricultural finance and inputs.

He said most farmers who got financial assistance from finance houses were getting bonded to the financial institutions.

Instead of financing their inputs from the sale of their produce, farmers were having to rely on loans every year.

“Farmers are thus moving into a vicious circle where they become entirely dependent on loans to survive,” said Cde Gapare, adding that the circle may become difficult for the farmers to break.

He said some farmers had managed to get licences to enable them to buy farm inputs without having to pay sales tax, but some had not been able to realise the full benefits of such agreements.

However, some farmers in the rural areas who were unable to join groups which ordered inputs from towns, had to buy from rural retailers who often overcharged.

He added that it was time input distributors and manufacturers went rural to enable communal farmers to obtain inputs at fair prices and at sites close to their operations.

Cde Gapare said investment to combat poverty must aim at creating employment, generating rural capital and at industrialisation.

In addition, the investment should aim at providing essential services to rural people.

“This involves tying money in research, infrastructural development, human development and training,” said Cde Gapare.

For these investment targets to be realised, he said, they must be rural farmer-oriented.


  • Agro-business is big business, and the resuscitation of Zimbabwe’s economy depends on appropriate and affordable funding mechanisms for farmers by banks and other financial institutions. An agricultural economy that relies on farmers who live a life of paying off legacy debts is not only unsustainable, but is bad for food security. Thus agricultural loans must be affordable.
  • Over the years, Government has tried to mitigate the funding challenges in the agricultural sector, by introducing programmes that see farming inputs being distributed to farmers early so that they post a better crop harvest.
  • Drought, soaring prices of agricultural inputs and banks’ stringent conditions on loans remain the vicious cycles for farmers as they also erode their incomes.
  • The likes of Robinson Gapare and Gary Magadzire are heroes of the agriculture sector who worked so hard to prove that black people are capable farmers.

To that end, the Great Zimbabwe University has honoured the latter by setting up the Gary Magadzire School of Agriculture and Natural Sciences.