A US$50 million crop buffer fund administered by the AFC Bank is being set up by Government to expedite payments to farmers who usually experience delays in payments for grain deliveries to the Grain Marketing Board.
Lands, Agriculture, Fisheries, Water, and Rural Development Minister Dr Anxious Masuka announced this yesterday during his tour of the Bubi-Lupane Irrigation Scheme in Lupane, Matabeleland North.
The irrigation scheme is part of the Government’s initiatives to transform rural livelihoods and communities were shareholders in the project where they also provided labour in the 180-hectare scheme.
During the tour, Minister Masuka was heard that the scheme has incurred penalties from the bank for the delay in servicing their loan, which is a direct adverse impact of delayed payments by GMB.
“We think whatever has been delivered to the GMB, and so that we are not held up and farmers are not inconvenienced by these delayed payments, we are establishing what we call purchase buffer fund at AFC, and it is going to be funded by another innovation that we have put forward,” said the minister in response.
“We have established a land bank. We have given AFC some land, which they will develop and able to sell as developed land to create this US$50 million crop buffer fund.
“So, AFC in due course will be able to intervene and purchase all the crop that has been delivered at GMB, of which Treasury would not have been able to pay for because of cash flow reasons and they get a warehouse receipt for it.”
Dr Masuka said the bank would then engage the Ministry of Finance, Investment Promotion and Economic Development to recoup its funds.
He said the Government owed farmers US$44 million from the winter wheat crop, which could have easily been cleared through the crop buffer fund.
“They will be able to dispose of the warehouse receipt at a profit and dispose of it to the Treasury and replenish this crop buffer fund. The Government currently owes farmers is US$44 million, so if we had established this earlier, we would have cleared all the debts that we owe to farmers,” said Dr Masuka.
He said delays in paying farmers their money was affecting their planning hence the fund will address all the related problems. It was worrying that Bubi-Lupane Irrigation Scheme members had to incur penalties despite impressive production.
“What we understand from Lupane here is that despite their stellar performance, especially in wheat production where each of the 90 families were supposed to receive US$800 per head as dividend, that has been reduced substantially because there is a penalty payment because of the interest that is accruing on an account that they have not been able to service because they have not been paid by GMB because GMB has not received money from Treasury,” said Dr Masuka.
To address the challenge, he said the Government will facilitate a meeting between AFC as the financier, and ARDA, the estate manager to resolve issues relating to penalties that scheme members should not be liable to.
Dr Masuka said the Government had also set in motion measures to expand the Bubi-Lupane Irrigation Scheme from the 180ha under irrigation to nearly 500ha.
“Coming specifically to the crop here and what they have been able to do, you can see that increasingly they are beginning to gain the confidence to produce crops under this harsh environment,” he said.
“Clearly, going forward with the agronomic and scientific methods of farming, we think this will be a profitable business. In this regard, we are anticipating and contemplating the expansion of this project to at least 480 hectares irrigable,” said Dr Masuka.
He instructed ARDA management to establish a master plan for the irrigation, which will also address value addition and beneficiation of crops produced at the irrigation.
“Competently we want to be able to look at the agro-processing for rural industrialisation to be able to produce mealie meal, to be able to produce cooking oil, and to be able to produce bread.
“We also want the scheme to be fully self-sufficient in terms of mechanisation, and in this regard, we will facilitate their access to mechanisation equipment so that they can operate independently,” said the minister.
“I’m very pleased that they continue to work amicably to resolve the cash flow challenges associated with penalties and interest rates by AFC. We are on our way to ensuring that this irrigation scheme business unit is viable.”
The minister handed over a tractor to the scheme, which he said was a donation from the President.
Dr Masuka said the Bubi-Lupane Irrigation Scheme is setting the tone for rural industrialisation as enunciated by President Mnangagwa.
The model where community members are stakeholders with ARDA providing technical expertise is being replicated across the country.
“The proof of concept was here where we took the harshest of environments to do a proof of concept and clearly it shows that in this harsh environment, you can grow crops profitably.
“I expect that from the 460 irrigation schemes dotted around the country, we have now handed over to ARDA, 390 schemes. We are slightly behind as we had hoped to conclude the handover by the 31 December and this handover process will ensure that they are run as business,” said Dr Masuka.
“At all the irrigation schemes, we are establishing companies. So, these companies, whose shareholding is by villagers, own an asset and more importantly, they are also workers and they are paid on a monthly basis, and at the end of the cropping cycle, they are paid a dividend.
“And we have seen that this model can be successfully replicated and this is what we want to see. We are complementing this model with other interventions.”
SOURCE : ZIMBABWE SITUATION
