Hosia Mviringi
The Land Reform program which took root in the early 2000s was only but a portion of a broader grand scheme of total economic emancipation of the previously disadvantaged black indigenous people.
More than 300000 families were empowered through a deliberate resettlement program on fertile agricultural land, which previously had belonged to a handful of white commercial farmers, who numbered only up to a paltry 3000.
The process of giving land to the people was only a first step towards full emancipation and total empowerment of the indigenes.
However to the uninitiated, under-utilisation of land and low productivity on the farms became a symbol of failure for the indigenous farmer and to a larger extent on the part of government.
Many critics, some out of ignorance, some out of sheer malice, blamed government for low productivity due to what they termed “a chaotic” land reform program.
The process could not have been done any better, what happened was what the circumstances demanded.
In any case the land reform program was not being judged for what it is, a truly empowering project, but for what it lacked.
The land reform process lacked the necessary support to see it through to its logical fruition.
The indigenous farmers went onto the farms as agronomical toddlers who needed hand-holding and nourishing through financial support.
It then became unfair to judge the new farmers for failing to deliver in the absence of the necessary support.
And the government of President Emmerson Mnangagwa realised this abnormality and set forth a plan to correct it and restore agricultural productivity, albeit under new stewardship of land.
In the early days before the historic land reform , banks, and specifically the former Agribank, had a skewed lending policy which favoured established farmers, most of whom already afforded to produce without any loans, yet they could borrow because they afforded the required collateral.
Commercial Banks in Zimbabwe discriminated against newly resettled farmers mainly because they had no history of production, neither did they have appropriate assets for collateral. Thus they were classified as a business risk. But how could they have a track record of production and a whole host of assets for collateral, when they have just been resettled?
That is when the government of Zimbabwe realised that indeed something has to come first, the egg or the hen.
In this case financial support must come before a farmer can have a history of production, thus the creation of the Agricultural Finance Corporation Holdings (AFC Holdings)
The restructuring, remodelling and redirecting of the former Agribank was deliberate, and a direct response by government to the plight of small scale farmers, who ironically have been the biggest producers of the staple grains, while large scale commercial farmers chased cash crops such as tobacco and horticulture.
A good example was set in 2017 with the historic $2.7billion Command Agriculture program which saw the country achieving surplus maize deliveries of more than 2million tonnes for the first time since independence in 1980.
Command Agriculture entailed providing farmers with the requisite resources and technical skills, to optimally produce specific crops sustainably.
But the Command Agriculture system could not be sustained due to it’s ad-hoc nature and lack of a sustainable funding model.
A successor program, Pfumvudza/Intwasa that succeeded command program was eye opening as it proved that with adequate support the Zimbabwean small holder farmers, had what it takes to produce food for the nation and earn the converted bread basket status again.
More than 2.4million farmers were supported with inputs and extension services. As they say, the rest is history. A 199 per cent increase in production yield is projected for this season.
Indeed Zimbabwe may not need to import food again.
Now with this realisation, and the need for Agriculture to actively support the national vision as espoused in the National Development Strategy 1 (NDS1), government mooted a permanent and more sustainable model of Agricultural Finance through the remodelled AFC Holdings group.
AFC Holdings will house four subsidiaries which will share the workload and responsibilities which hitherto rested on the shoulders of a single entity, Agribank.
AFC Land Bank will afford local small holder farmers access to affordable finance at favourable terms to encourage increased productivity on the farms.
Farmers will have to focus on what they do best, that’s working the land for improved productivity.
This time around the government thrust is in transforming local farmers into real business people, and to engender a business approach to farming.
The AFC Insurance company will take the load of worry off the farmer’s shoulder as the company will underwrite the risk involved in farming such as droughts, natural disasters and fire destruction. This means that an insured farmer can afford to plan ahead without fear of losing money from his projected yield.
Agricultural Insurance cover is as important to a farmer for peace of mind as it is to business or property owner.
The AFC Leasing Company will provide Agriculture specific leasing of equipment to farmers. This takes away the pressure to own equipment by the farmer.
Every farmer, large or small, can afford to produce without necessarily owning the equipment
With assured access to relevant equipment and technology, every farmer can now plan ahead knowing that AFC Leasing company is there as a companion for productivity.
AFC Commercial Bank is the commercial arm of the group which will handle the investment needs of the farmers.
This arm will handle the mandate to mobilise affordable finance from the private sector and the international partner financiers for on lending to farmers through the Land Bank.
This makes the group a compete entity for agricultural support.
As Permanent Secretary in the Ministry of Lands, Agriculture, Fisheries, Water and Rural Resettlement, Dr John Basera rightly put it,
“If we get Agriculture right, then we can get everything else right.”
Increased agricultural production has the capacity to spur production in industry as the supply of raw materials increases.
The multiplier effect is the increased employment creation and revenues for government and subsequently increased infrastructure development activity.
This bolsters the notion that Agriculture is the backbone of the Zimbabwean economy.
This move by the government comes at a time when international financing for local agricultural projects has dried up due to unjustified unilateral sanctions.
It is equally important to note that the predecessor, Agribank, was under European Union and the United States sanctions which prohibited the bank from doing business with international partners.
The AFC Holdings in its new reconfigured state has been the missing cog in the drive to attaining the goals as set out in President Mnangagwa’s Vision2030.
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