Wednesday, August 10, 2022
Climate Africa Adverts
HomeAgricultureCommand Agriculture, Turning Into A 'Debt Sink-Hole’

Command Agriculture, Turning Into A ‘Debt Sink-Hole’

ZIMBABWE’S State-supported agriculture programmes widely known as Command Agriculture, have morphed into a “debt sink-hole”, with the bulk of farmers receiving inputs assistance to boost production for national food security, largely defaulting.

The Government of Zimbabwe has since 2015 been running State-assisted agricultural schemes to drive output among farmers through guarantees to input suppliers and financiers, but has failed to recoup the investment and sustain the desired output.
Rightly, the Command Agriculture programmes were a way to improve agricultural production following the land reform programme because banks were reluctant to lend money to farmers who had no title to their land.
As such, the Government started funding agriculture by providing the farmers with inputs, for which the farmers would reimburse the Government after they had harvested and marketed their produce.
According to legal think-tank, Veritas Zimbabwe, which provides information on the work of the Parliament and the Laws of Zimbabwe and makes public domain information widely available, inputs were initially provided by way of loans to the farmers with their debts being guaranteed by the State.
However, there was a high default rate on the loans – 85 per cent – so the State as guarantor of the loans has had to bear most of the cost of the programme.
Notably though, reasons for failure to repay agricultural loans guaranteed by the State vary from one farmer to another but include reluctance to honour debts due to greed, inadequate inputs received, which affects yield and regular droughts.
Economist Eddie Cross, however, said the Command agriculture was initially successful, but only briefly given Zimbabwe almost came to self-sufficiency after 2017 before it took a                                           tailspin.
“It’s been a bit of history now because the Command Agriculture was launched about four years ago and basically ran for about three years and many billions of dollars were committed to it.
“It did have a dramatic impact on agriculture in the first year, but in fact defaults on repayment were huge, more than 80 percent of the loans were not repaid. Because of that, it became unsustainable for the Government, which basically abandoned it.
“It is now looking at alternative ways of funding agriculture . . . but (under Command Agric), we came close to being self-sufficient for a very brief time, for 18 months or so. But it was unsustainable, now we are looking at other creative ways and a more sustainable system going forward,” he said. *Business Weekly*


Please enter your comment!
Please enter your name here

- Advertisment -
Google search engine

Most Popular

Recent Comments