Defaulting farmers to lose offer letters

Farmers who did not sell their maize to the Grain Marketing Board (GMB) or those that default on repayment of loans advanced to the them under the National Enhanced Agriculture Productivity Scheme (NEAPS), commonly known as Command Agriculture, risk having their offer letters revoked.

Further, they will not be considered for the facility during the 2021-22 season. Command Agriculture was initiated in 2016 to ensure national food security, accelerate import substitution, create employment and improve incomes and livelihoods.

Lands, Agriculture, Fisheries, Water and Rural Resettlement Minister Dr Anxious Masuka said contract arrangements for the 2021/2022 season were being strengthened to deter side-marketing, non-performance and under-performance.

"Farmers who have fully paid their debts will be immediately enrolled for the 2021/2022 season," he said on Friday.

"Farmers with outstanding debts will not be enrolled for the 2021/2022 season until they have made an immediate payment of at least 50 percent of the 2020/21 summer season total loan amount by September 31, 2021."  

Minister Masuka said farmers who would have made a repayment of at least 80 percent for the 2020/21 summer season total loan amount by November 30, will be considered.

Also to benefit from the facility during the forthcoming season will be those who signed a commitment with an asset pledge to pay the programme in full before the onset of 2021/2022 season.

"For the avoidance of doubt, banks that lend to farmers who have not fulfilled the above, will be liable for any defaults.

"Additional measures will be taken and all national payment platforms will be activated to ensure repayments by defaulting farmers, including submission of names to the Financial Clearing Bureau.  

"The Minister reserves the right to revoke offer letters for farmers who use their offer letters to the detriment of Government-supported programmes, including an intentional failure to settle loans," said Minister Masuka.  

More than 15 000 farmers benefit from this NEAPS annually, while over 2,3 million small-holder farmers benefit from social protection schemes annually.

Minister Masuka said Government would continue to implement the two-pronged approach in financing agricultural activities, with the fiscus focusing on supporting vulnerable households with inputs under the Productive Social Protection Scheme (Presidential Inputs Scheme), while the private sector is provided with an appropriate environment to finance commercial activities, including guarantees, where necessary.

He said the success of NEAPS was pivotal for sustainable financing of the agricultural sector.  

"The success of NEAPS is dependent on repayment of loans by farmers, avoidance of side-marketing, and restoration of financial discipline and ethical conduct in the conduct of business by all stakeholders in the agricultural value chain.

"Government has issued Statutory Instruments (SI 247 of 2018, SI 145 of 2019, SI 96, SI97 and SI 188 of 2021) to protect contractors, including Government. Farmers have overwhelmingly supported these Instruments by honouring their obligations. We thank these farmers for this effort. "Unfortunately, some farmers have ignored these SIs and have gone ahead and side-marketed their crops prejudicing contractors and jeopardising repayments to banks that funded the NEAPS," he said.  

Minister Masuka urged farmers not to jeopardise agricultural transformation by not paying back loans.  NEAPS is backed by a Government guarantee to banks that raise capital to lend to farmers to enhance local agricultural production through concessionary loans.  

"Government has assisted to ensure NEAPS is well funded with the ultimate goal of converting repayments from recoveries into a revolving fund. This allows current and new farmers to continue benefiting from the programme."