November 18, 2005

60% of government‘s agricultural funds have disappeared

About 60% of the funds government allocated to the agricultural sector disappeared before they reached the farmers, a parliamentary report has said. The report, compiled by the Parliamentary Portfolio Committee on Lands, Land Reform and Resettlement, revealed that about $70,8 billion of the $118 billon that government had set aside to fund the agricultural inputs cannot be accounted for. The report follows the committee's July fact-finding mission on the State of Preparedness by the Agricultural Sector for the 2005/2006 summer crop. According to the report, between 2000 and 2005 the government has availed $118 billion to finance the agricultural sector. "Farmers representatives also alleged that only 40% of funds availed by the government to the agriculture sector reached farmers on the ground," the report said. "As a result, the funding channelled to agriculture for the last five years has not made any significant impact on turning around the fortunes of the sector. Stakeholders are urged to revise its financing strategies and come up with appropriate and comprehensive financing models in order to achieve desired results."
The committee chaired by Walter Mzembi, the MP for Masvingo South, said the current summer season was no better than previous seasons due to limited stocks of inputs and foreign currency shortages. The committee found that lack of clear financing models, coupled with the late release of funds and bottlenecks experienced by farmers at lending institutions were a major hindrance to full agricultural recovery. The central bank has since come up with a successor facility to the Productive Sector Facility (PSF) known as the Agricultural Sector Productivity Enhancement Facility (ASPEF). Farmers' representative organisations expressed reservations about the ASPEF arrangement. "They (farmers) said they would sink deeper into debt as they were already reeling under the 50% interest rate," the report said. "This financing model was a short-term measure with a repayment period put at six months. As a result, those farmers that ventured into 12-month cycle crops could not pay back the loans at the stipulated time. At the expiry of the repayment period, the RBZ immediately applied commercial interest rates of 300% to loans drawn from the PSF."
The committee received oral evidence from Ministry of Agriculture permanent secretary, Simon Pazvakavambwa, and Stuart Hargreaves, principal director for livestock and veterinary services. The committee also received inputs from Agribank head Sam Malaba, central bank governor Gideon Gono, Noczim director Zvinechimwe Churu and farmers representatives and seed houses. According to the report, government under its command agriculture model, was working on a target of 1 500 000 hectares to produce 2 250 00 tonnes of maize at a cost of $5,967 trillion. But the report says the gap between government's targets and the available stocks of inputs points to a serious lack of planning at state level. "It is your committee's considered view that this lack of coordinated approach will not yield the desired results," the report said. The committee comprises chiefs and MPs namely Chief Show Bushu, Chief George Chimombe, Joel Gabbuza, Shuvai Mhofa, Aqualinah Katsande, Sabina Mugabe, Edward Mkhosi, Margaret Pote and Gilbert Shoko. (The Zimbabwe Independent / Harare)

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