Farmers financed under Command Agriculture have until November 30 to deliver their maize to the Grain Marketing Board or be blacklisted so they can not access any more Government-guaranteed loans and face losing their offer letters and tenure documents and thus their farms.
The National Enhanced Agriculture Productivity Scheme (NEAPS), commonly known as Command Agriculture, requires farmers to repay their loans, usually in the form of deductions from their crop payments when they deliver.
The Financial Clearing Bureau then records their creditworthiness.
NEAPS was this year sponsored by the CBZ-Agroyield, which as a private banking scheme is baacked by a Government guarantee to banks that raise capital to lend to farmers to enhance local agricultural production through concessionary loans.
Government has assisted to ensure NEAPS is well funded with the ultimate goal of converting repayments from recoveries into a revolving fund, meaning that the money paid back this harvest can be relent to farmers to buy inputs for the next cropping cycle.
This would convert one-off arrangements into a permanent source of funding.
Last month the Ministry of Lands, Agriculture, Fisheries, Water and Rural Resettlement was expecting all farmers who benefited from Command Agriculture to ramp up deliveries and recoveries, Minister Dr Anxious Masuka said, so the proceeds can be rolled over to fund the forthcoming season.
Minister Masuka recently highlighted that farmers with outstanding debts will not be enrolled for the next season until they have made a repayment, and this needs to be done by November 30.
“For the avoidance of doubt, banks that lend to farmers who have not fulfilled the above, will be liable for any defaults. Additional measures will be taken and all national payment platforms will be activated to ensure repayments by defaulting farmers, including submission of names to the Financial Clearing Bureau,” said Minister Masuka.
Without a Government guarantee banks then have to assume the risk entirely themselves, and this was the sticking point that saw the Government moving in with guarantees so the banks could do their job.
Permanent Secretary in the Ministry Dr John Basera said the Minister reserved the right to revoke offer letters for farmers who use their offer letters to the detriment of Government-supported programmes, including an intentional failure to settle loans.
“After November 30, we are seriously coming for those farmers defaulting. Farmers be warned.”
Command Agriculture was introduced by Government in 2016 to ensure national food security, accelerate import substitution and as a key driver to economic recovery.
It mainly benefits the A2 resettlement farmers and other farmers with the larger farms. The programme was also targeted at creating employment and uplifting livelihoods.
Command Agriculture has resulted in an increase in production of both maize and wheat and the ministry believes it is a catalyst to the attainment of Vision 2030 and realisation of the National Development Strategy 1.
So far the programme has registered success especially during the last season where over 1 million tonnes of maize was produced.
After initial success, last year the Government changed the model to bring in participation of the financial institutions such as CBZ, Agribank and Stanbic as part of the programme to create a permanent and normal financing arrangement.
Zimbabwe is expected to harvest 2,7 million tonnes of maize during the present summer cropping season, the highest yield in 20 years.
Success was also registered in wheat production during last year’s harvest when the country produced enough cereal to cover nine months’ supply and this harvest is expected with the modest carry-over stocks to see Zimbabwe managing without further imports.
Wheat production has been rising fast. In 2019 farmers produced 220 000 tonnes of wheat from 45 000 hectares but this winter more than 320 000 tonnes of the cereal are expected from the 66 400 hectares put under the crop.
“Eighty percent plus of this year’s winter wheat crop is coming from NEAPS,” said Dr Basera.
Meanwhile, Dr Basera said the next round of NEAPS will be funded partly through AFC and partly through CBZ backed by Government performance guarantees for the contracted farmers through Treasury.
“The scheme is targeting to establish 440 000 hactares. The target is 390 000 hectares of maize and 40 000 hectares soya bean,” he said.