Martin Kadzere : Senior Business Reporter
INSURANCE companies and pension funds have mobilised about $41 million to finance the 2016 /17 agriculture season, the Insurance and Pension Commission said yesterday. Chairperson Mrs Lynn Mukonoweshuro said in an interview insurance companies and pensions funds would participate in agriculture instruments with prescribed asset status.Some of the funds will also be channelled towards the Government’s command agriculture programme.
Recently, Government launched command agriculture with a target of financing 400 000 hectares of maize crop. The programme is expected to produce two million tonnes of maize, which would drastically cut the food import bill or eliminate it.
The Government has already appealed to pension funds to assist in raising about $350 million of the required amount.
“Our budget for the forthcoming season is $50 million and so far, we have mobilised $41,2 million. We are close to reaching the target,” said Mrs Mukonoweshuro.
Finance and Economic Development Minister Patrick Chinamasa said the Government was engaging the banking and private sector to mobilise funds to support farmers under command agriculture.
Already, a facility to the tune of $85 million is now in place, and is being co-ordinated through the Office of the President and Cabinet.
Of the targeted hectarage, 264 000 hectares is dry land while 136 000 hectares is irrigable. This import substitution maize production programme is targeting both A1 and A2 farmer participants as well as Government institutional farms, particularly those near water bodies.
Over the past few years, the insurance and pension industry has participated in prescribed papers worth $150 million. These include housing, agriculture and energy bonds.
Pension funds are required to invest 10 percent of their assets funds in prescribed assets and 7,4 percent for life and funeral assurers. Short-term insurers and short term re-insurers are required to invest 5 percent.
While there had been an improvement in compliance to the prescribed assets requirements across the industry, a few players whose prescribed assets holdings were far above the minimum requirement accounted for the overall industry’s compliance above the minimum requirement.
The majority of the players remained non-compliant. Out of 54 underwriters that were operating as at end of March 2016, only 17 were compliant with the minimum prescribed assets ratio, according to Minister Chinamasa.