GOVERNMENT has no capacity to meet the total financing requirements for the agricultural sector.
Presenting the 2007 bud
get, Finance minister Herbert Murerwa told Parliament that government will continue to play its part, and expects greater involvement of the private sector including the banking community to fund the farming sector.
“Historically, the banking community has funded the operations of commercial farmers,” Murerwa said. “Under the auspices of the National Economic Development Priority Programme, the private sector is being encouraged to go into the production of their requirements of feedstock for processing such as wheat and soyabean. I would like to challenge the private sector to fully participate in this programme in the forthcoming season.”
He said the banking community had raised concern with security of tenure as a major factor limiting its capacity to support farmers.
“The issuance of 99-year leases to some of the A2 farmers by His Excellency the president on November 9 2006 should allay these fears, and introduce an environment conducive for banking sector involvement in the financing of agriculture,” Murerwa said.
He said the 99-year leases could be registered with the Deeds Office like title deeds, thereby enabling banks to recoup their money from the lessee or any other person to whom the lease might be transferred. The land, however, remains state property and can only be transferred with the consent of government.
“A1 model farmers will also soon be assured of security of tenure through the issuance of usufruct permits, which give the legal right to use and derive benefit from state land,” he said.
Murerwa said government will monitor and review agricultural producer prices, balancing this against changes in costs of production and reasonable rates of return for the farmer. He said to attract and give confidence to foreign investors, government was fully committed to honouring all its international obligations under various protocols.