GOVERNMENT has adopted a new funding model for Command
Agriculture during the 2019/20 farming season which will see it providing
guarantees with banks and the private sector funding the programme to unlock
the required $2,8 billion.
The Government has since invited private partners to fund
the programme at an interest rate not exceeding four percent as it seeks to
dilute its role as the sole financier.
Speaking during a Question and Answer session in the Senate
on Friday, Lands, Agriculture, Water, Climate and Rural Resettlement Minister
Perrance Shiri said Treasury had committed to issue $968 million worth of
guarantees.
“The approach to financing the special maize and soya beans
programme which is commonly referred to as Command Agriculture has changed for
the forthcoming season. The programme will be funded through the banks and
private sector with Government providing guarantees. Treasury has committed to
issue a guarantee worth RTGS$968 million to unlock the required funding of
RTGS$ 2,8 billion for the programme,” he said.
Minister Shiri said the Government guarantee is a vital
fall-back position for banks and private sector players participating in the
programme. He said the Government has already come up with requirements for the
coming farming season.
“We have approached various stakeholders to play their
respective roles and we are in the process of receiving and distributing inputs
to the farmers. So, funding has been availed for the coming 2019/2020 season
though the approach this year is slightly varied from what we used to do.
However, funding has already been put in place and acquisition of various
inputs like fertilisers, chemicals and seed is already taking place and has
taken place in some cases and farmers have started receiving inputs,” said the
Minister.
Minister Shiri said Command Agriculture was a transitional
arrangement which was not meant to replace the role of market forces and the
role of financial institutions in financing agriculture.
“Once the private sector comes on board and starts
financing agriculture, Government’s involvement shall only be limited to a
regulatory role and capacity building.
To ensure that the programme is fully funded, the financing
mechanism is highly dependent on strong Public Private Partnerships (PPPs). In
this kind of arrangement, Government invites private partners to fund the
programme at a rate not exceeding four percent,” he said.
Presenting his Mid-Term Fiscal Policy Review and
Supplementary Budget Statement last month, Finance and Economic Development
Minister Professor Mthuli Ncube said Government has earmarked $2,8 billion for
Command Agriculture.
He said Government would extend the facility by another
year earmarking 210 000 hectares of maize and 30 000 hectares of soya beans
during the 2019/20 summer cropping season.
The Finance Minister said the programme would only benefit
farmers with good track records of repaying loans and producing high yields.
Prof Ncube said Government was this year targeting to
support 640 000 hectares of grain crops that include maize, sorghum and pearl
millet under the Vulnerable Households Inputs Support Scheme.
The Office of the President and Cabinet oversees Command
Agriculture, while the private sector focuses on financing. Herald
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