The days when farmers would require collateral to access mechanised equipment such as tractors and combine harvesters have passed following the introduction of the Agriculture Finance Corporation Leasing Company, which is providing farmers with the service at an affordable fee.
Lands, Agriculture, Fisheries, Water and Rural Development Secretary Permanent Dr John Basera said Government had come up with a cocktail of measures to cushion those farmers without collateral but with potential by creating conducive environment that maximise their agriculture yields.
Dr Basera said this on Friday in an interview with journalist, Lee Ann Bernard on her social media page.
He said there were also finalizing discussions with financial institutions to ensure that Government’s 99-year leases were bankable and acceptable.
Dr Basera said there was nothing that stopped a viable project to be bankable.
“There is incredible progress in making our 99-year leases bankable,” said Dr Basera.
He said several farmers had also accessed mechanisation services from AFC under a leasing agreement which the financial institution is currently providing.
“I am aware of many farmers who have been assisted under the AFC Leasing Company who had no collateral. We created a vehicle at AFC to lease equipment. We have got to a point where a farmer does not necessarily need to own a tractor or combine harvester but can still access the service.
“You might not be able to afford a tractor but you can still access the service,” said Dr Basera.
The AFC, which includes Land and Development Bank was launched to boost and formalise finance for farmers across the full range from communal land holders to large scale commercial farmers.
It is wholly-owned by the Government and was established following the restructuring of Agribank.
Dr Basera said there was also a John Deer mechanisation facility where farmers get delivery of the equipment upon payment of a commitment fee of around 20 percent.
He said the facility did not require collateral and it was unlikely that a farmer could default.
“There is no need for collateral. If you pay 20 percent of the cost and default the next year, it will be a disincentive to you because you have already paid a commitment fee. These are some of the measures we are taking to assist our farmers,” he said.
Turning to paying of cotton farmers, Dr Basera said Government had made a commitment to settle what was outstanding which was around $1,5 billion through period payments through Cottco.
“But what is important to know is that we are supporting our farmers with free inputs, half a million of them are getting support from Government with free inputs. Their duty is just to produce and sell to Cottco,” said Dr Basera.
He said his Ministry rolling out these various projects to boost productivity and ensure that the country attained an upper middle class by 2030.