Tuesday, May 21, 2024

Government Launches Sustainable Agriculture Financing Facility to Boost Farming

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The Zambian government has introduced the Sustainable Agriculture Financing Facility credit window, marking the beginning of the registration process at district agriculture coordinators’ offices. This initiative, designed to support and promote sustainable agriculture practices, aims to provide accessible loans to farmers.

Agriculture Minister, Reuben Mtolo, revealed that these loans will be made available through banks at a competitive interest rate of 12 percent. The minister emphasized that all beneficiaries will be required to enter bonding agreements, committing to selling their produce to the Food Reserve Agency (FRA). This commitment serves as a market facilitation strategy, ensuring food security for the nation.

During a ministerial statement presented to the National Assembly, Minister Mtolo clarified that the loans would be provided in the form of farming inputs. This targeted approach aims to benefit those farmers who are not covered under the Farmer Input Support Program (FISP), allowing them to access essential resources for agricultural production.

It is important to note that the Sustainable Agriculture Financing Facility will not distribute cash to farmers. Instead, the focus is on providing the necessary inputs and support to enhance agricultural productivity and food security in the country.

The launch of this credit window is a significant step in advancing sustainable agriculture in Zambia, offering financial support to farmers and reinforcing the nation’s commitment to food self-sufficiency and economic growth. This initiative holds the potential to improve the livelihoods of many smallholder farmers across the country.

8 COMMENTS

  1. Instead of lending money why not just improve on FISP like including a recovery system.
    Many peasant farmers don’t have collateral to qualify them for loans.

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  2. Make sure there is an accountable system to ensure that the farming equipment and inputs provided to these farmers are not sold for cash. Currently a number of FISP beneficiaries sell the fertilisers and seeds they get from FISP for cash. Most serious farmers who are not FISP beneficiaries buy the fertilisers and seeds from some of these FISP beneficiaries who need immediate cash. It is not enough to use terms such as sustainable without a serious analysis of what challenges rural farmers face on the ground. The idea to give loans in the form of equipment and inputs sounds good especially if this could include possibilities for increasing irrigated farming. Providing inputs to farmers depending on unreliable rainfed farming risks putting money in the drain.

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  3. Perhaps a more balanced loan approach would be to provide the loans in two forms- cash form and inputs/equipment form. This may reduce the number of farmers who will have an incentive to sell the inputs/equipment for much needed cash.

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  4. The response is likely to be poor because a well planned program can’t be launched right at the beginning of the planting season. How do farmers plan? Many of those that might access these loans will do it because there’s no alternative. They have no time to study the terms or the consequences. Is this what he meant when he said he’ll be methodical? My foot!

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