Diversification holds the key to sustained agricultural production

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Supporting agriculture: Stanbic Head of Agribusiness Leon Kotze and Head of Marketing Perry Siame.

Leading agriculture sector lender Stanbic Bank, says agricultural diversification holds the key to sustained production.
Stanbic Head of Agribusiness Leon Kotze, this week headed north to Kitwe to address agricultural producers at the 2017 CBM-TECH and CAMINEX, the Copperbelt Province’s premier mining, agriculture and trade exhibition, where he made a presentation on “Key fundamentals of finance and farm management”.
Mr Kotze said Stanbic had been having a lot of conversations with its customers in the agriculture sector around diversification.
“It is important that farmers also look at their cash flows and gauge the right time to invest in the diversification of their businesses and to ensure that their crops don’t suffer,” he said.
He emphasised the need for farmers to measure and monitor the lifecycles of their commodities and the various strategies they could apply to ensure their businesses remained sustainable in the face of external shocks.
Mr Kotze said farmers needed to consider several things as they diversified their production, including making informed decisions using production data and records as well as maximising their management capability.
He said that over the last ten years, the agriculture sector in Zambia had been maturing, evidenced by above-average production of major crops such as wheat, soybeans and maize. However, diversification would ensure they hedged against price shocks.
The last few years have seen Zambia’s agriculture belt shifting northwards to the Copperbelt’s rural towns such as Mpongwe, as well as parts of North-Western Province that are enjoying appreciable amounts of rain. The Southern and Eastern province belts have suffered lower production due to lower rainfall patterns.
Mr Kotze said Stanbic’s confidence in the industry had also grown over the last ten years, with farmers improving their loan repayments. He said statistics showed that from 2007 to 2009, non-performing loans in the agriculture sector were quite high at above 30 percent for all bank funding that was channelled to the agricultural sector. But between 2010 and 2013 the sector rebounded with improved production and better prices, which saw non-performing loans come down to levels of 10 percent.
“We take a long-term view on investments that our customers make in the agriculture sector. Whenever we fund we make sure that our assumptions are based on very realistic long-term assumptions,” Mr Kotze said.
In 2016 Stanbic was declared the ‘Best Agribusiness Bank in Zambia’ by the Global Banking and Finance Review following the bank’s investment of US$200 million in the local agriculture sector.
Stanbic offers agricultural loans of varying terms to clients engaged in the farming of staple as well as cash crops, horticulture, plantations, poultry, animal husbandry, dairy, seeds and warehousing. The bank also finances the supply of a wide range of agri-input products like seeds, fertilizers, pesticides, micro nutrients and irrigation equipment. The bank’s support also extends to transportation, storage and processing of food and other agri commodities.

Stanbic Head of Agribusiness Leon Kotze listens to a customer.

8 COMMENTS

  1. This year the marketing of maize and soya beans has been a failure- FARMERS HAVE MADE A LOSS WITH LOCAL PRICES UNSUSTAINABLE, THEN YOU PUT EXPORT BARRIERS 10 PERCENT TAX???? WHO IS GOING TO VENTURE INTO FARMING WHEN IT IS SO UNPROFITABLE?????
    Dora and Mutati are solely to blame. Then we have these numbskulls in Znfu and ZCF who are living on high towers out of touch with reality instead of praising the useless evoucher nonsense you should lobby the govt to allow all farmers to export their maize and soya with a useless 10percent tax!

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  2. The 10% is almost inevitable. These Farmers are very greedy. You want to bake a cake and eat it all by yourself. You forget who helped you bake it.

    STANBIC AGRIBUSINESS looks like it’s helping Commercial farmers who don’t need help. They are teaching a choir how to sing. They’re millions of small scale farmers that need help.

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  3. For how long will the diversification lyrics continue to be sung yet no one is dancing to it? Adaptations of experiment after experiment and re-inventing the wheel is the order of the day in the agriculture sector whose real advancement has remained static! Sorry William!

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  4. The question is NOT the 10% tax. The question is the TIMING of the tax.

    Last year we had a surplus vs a regional maize crisis. THAT was the time to put the 10% tax. Instead maizegate deals benefitted only a few individuals. Then govt banned exports which has resulted in large carryover stocks that exacerbate the current crisis whereby maize is going at K40 per bag !

    With a regional surplus, the export market has evoparated. SA has 3m tons surplus, Malawi has 1m ton surplus etc

    This is not the season for the tax !!!!

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  5. THERE DROUGHT IN EAST AFRICA AND THE QUICKER WE SEIZE THAT OPPORTUNITY TO SUPPLY MAIZE TO THAT REGION THE BETTER. IF THAT DOES NOT HAPPEN I WILL FEED MAIZE TO THE GOATS AND CATTLE. I CAN NOT GIVE IT FREELY AT K40. FORGET.

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  6. Just been watching Znbc news and I’m happy to see the President One ECL has heard the plight of the small scale farmer concerning this useless 10 percent tax imposed on small scale farmers by the likes of Mutati and Dora…secondly the govt should allow farmers to pay for this export permit at the borders instead of all permits being issued only in Lsk..how do you expect a farmer from Mumbwa to go to Lsk then back to Mumbwa and proceed to Kazungula to sell his soya beans in Botswana??? Those who’ve been tasked in this dept should be serious. Next year no one will grow food because of poor planning on the part of ministers and Perm Secretaries- you chaps are paid for doing nothing in fact you are causing more harm than good!

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  7. While this is a good initiative, only those who earn above K16,000 net per month are eligible and repayments are upwards of k5,000 per month if you add interest and insurance costs. That is just for the Tractor before you even talk about implements. Why not come up with a reasonable package – Tractor, plough, and planter for example. Looking at the brand of tractor also, expect high maintenance costs. Buying John Deere is like buying a Mercedes. It would have made sense if we were talking about more affordable brands. This is High risk at the moment given high interest rates and poor economic outlook! If you can afford, well and good. If you are just starting Run away!

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