Source: Optimism as Government unveils US$50m agriculture buffer fund – herald
Elita Chikwati, Zimpapers Writer
FARMERS are optimistic that the Government’s recent initiatives — including the establishment of a US$50 million buffer fund aimed at revitalising the agriculture sector — will improve access to funding and, in turn, boost productivity.
The Government has also introduced a policy under which state land will be managed by the Agricultural Finance Corporation (AFC), enabling the mobilisation of funds to support agricultural activities.
This was revealed by the Minister of Lands, Agriculture, Fisheries and Rural Development, Dr Anxious Masuka, while speaking at the recent Zimpapers Tobacco Conference, which was sponsored by CBZ, TIMB, OneMoney, POSB, Hunyani, Clover Leaf Motors, TSL, Pacific Cigarette Company and Purleigh Investments.
Minister Masuka outlined the Government’s plans to enhance the sector’s productivity and financial stability. He revealed that the ministry had developed a policy assigning sole responsibility for land management to the AFC, as part of efforts to boost local funding for agriculture. A US$50 million buffer fund has also been proposed to ensure timely payments to farmers for their grain deliveries.
“We made a policy as Government to ensure land that is opened up is not allocated to co-operatives again and will never be given to private developers. There will only be one entity to develop that land. The allocation of 11 000 hectares to the AFC Land Development Bank is expected to raise funds that will be reinvested in financing agriculture,” said Minister Masuka. He emphasised that this move marked a significant step towards efficient land use.
Tobacco Farmers Union Trust president, Mr Edward Dune, commended the Government for developing strategies that strengthen local value chain beneficiation and enhance agricultural productivity.
“We have been clamouring for this for over a decade, but we struggled to identify viable financial sources to fill such gaps. The industry has suffered from the side effects of offshore funding, which has disadvantaged farmers. This is a real wake-up call — if some players cannot shape up, then they should ship out,” said Mr Dune.
He urged authorities to expedite the implementation and monitoring of the policy.Zimbabwe Tobacco Growers Association president, Mr George Seremwe, said the move would positively impact the localisation of funding.
“Nevertheless, there is a need for consultation and involvement of farmers. Farmers should work closely with AFC.
There should be wider consultations with farmer organisations and the farmers themselves to ensure the facility is utilised in a sustainable and productive way,” he said.
Zimbabwe Commercial Farmers Union president, Dr Shadreck Makombe, said local funding was crucial not only for the tobacco industry but for the entire agriculture sector.
“All sectors — not just tobacco — are in need of funding. Of course, the US$50 million, although not sufficient, will go a long way. Empowering and supporting AFC will play a major role in invigorating agriculture,” he said.
The issue of local funding has long been a major challenge for the agriculture industry, particularly in tobacco. 98 percent of tobacco growers produce the crop under contract arrangements. Merchants rely on offshore funding, meaning the bulk of the revenue generated does not benefit local stakeholders.
For every dollar invested in tobacco production, US$0,88 is repatriated, leaving only US$0,12 in the country. Many farmers have called for local tobacco funding, which they argue would be more affordable and sustainable.
With local funding, farmers would be able to participate more fully in the value chain, add value to the crop, and sell finished products.
Minister Masuka also stated that the Government is working to address challenges associated with contract farming to ensure both farmers and merchants derive fair value from the crop.
“We want to ensure the tobacco value chain is stronger and more transparent so that there can be equitable distribution of benefits within this value chain,” he said.
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