GOVERNMENT is in a quandary over what to do with huge debts it is owed by farmers who benefited from the farm mechanisation programme following the changes to the exchange rate, businessdigest can reveal.
The Reserve Bank of Zimbabwe liberalised the foreign exchange rate policy, a move which immediately pushed the rate two weeks ago from US$1:$30 000 to US$1:$210 million. Beneficiary farmers under the farm mechanisation programme were supposed to pay for the farm equipment at the old rate of $30 000 for one US dollar.
However, the rate changed before the RBZ – through its fiscal absorption arm, Fiscorp – could invoice the farmers for the tractors since the exercise began last year.
Farmers are now supposed to pay their debts using the new interbank rate but this has caused consternation in government circles.
Some quarters in government are now pushing for the farmers to pay as little as $2 billion for a tractor that costs US$40 000 on the open market.
Other government officials are understood to be pushing for a total write-off of the debt as they argue that most farmers will not be able to pay the new prices which have been pushed up by the movement in the exchange rate.
They want the programme to be treated like a national project which government undertook to help farmers.
This proposal is tied, of course, to political support for the government.
Whichever route is taken, government is set to endure a staggering loss which would run into quadrillions of dollars, at the new interbank rates, for the equipment which includes tractors, combine harvesters, planters, hay bailers, dumper trucks and disc harrowers.
Over 2 725 tractors, 105 combine harvesters, 466 planters and 210 hay bailers were disbursed under the three phases of the mechanisation programme.
Inquiries to Fiscorp, the company responsible for collecting the loans, revealed the glaring anomalies surrounding the equipment.
Farmers have been given different explanations on the payment system.
Others have been told that they should wait for the central bank’s announcement on what price they should pay while others have been told to come and pay what they owe at the previous exchange rate of $30 000.
“They (Fiscorp) told me to just come and pay what is on the agreement,” said a farmer who got a tractor under the programme.
However, most farmers were never invoiced nor are they aware of what they are supposed to pay.
MDC agricultural secretary Renson Gasela who also received a Case International tractor said he had not been invoiced and that his attempt to be appraised by Fiscorp on the extent of his debt had proved to be fruitless.
“I checked with the RBZ sometime ago how much was due but I was not told,” Gasela said yesterday.
“I have not been invoiced but I have been informed that other beneficiary farmers have been paying as little as $2 billion for each tractor they received.”
The RBZ said it was not aware of any such developments which it described as false.
“That is bullsh**t. That is trash, there is nothing like that,” said Munyaradzi Kereke, special advisor to RBZ governor Gideon Gono.
“You can print it but you know the consequences.”
However, senior government and ruling party officials dominate the list of beneficiaries who have not yet paid for their farm equipment.
They include former deputy speaker of parliament and Zanu PF bigwig Kumbirai Kangai, Home Affairs minister Kembo Mohadi, Indigenisation and Economic Empowerment minister Paul Mangwana and Registrar General Tobaiwa Mudede.
The list also includes Foreign Affairs deputy minister Reuben Marumahoko, deputy minister for Industry and International Trade, Phineas Chiota and former GMB boss Samuel Muvhuti.
By Kuda Chikwanda