Farmers under Command Agriculture who failed to repay their loans at the end of last season owing to drought and the Covid-19-induced national lockdown, have been granted a huge relief after Government extended the repayment period by an additional three years.
This means the debt has been restructured and farmers will have to repay it in three instalments for the next three seasons.
CBZ Agro-Yield managing director, Mr Walter Chigodora, said this last week while giving oral evidence before Parliament’s Portfolio Committee on Lands, Agriculture Fisheries Water, and Rural Resettlement.
The committee, chaired by Gokwe Nembudziya legislator, Cde Justice Mayor Wadyajena (Zanu PF), wanted to know the financing structure of the programme.
“We have restructured the debt to run for three years so the loan will now have to be repaid in three years. So we are dividing the debt into three (seasons) and doing this will also ensure that we do not create a burden to Treasury,” said Mr Chigodora.
Legislators had asked what the financial institution was doing to those who failed to repay given that there was drought last season.
They also wanted to know if Government had chipped in to rescue defaulters given that Mr Chigodora had indicated that Treasury was coming in as guarantor to the scheme.
“Besides drought there was also Covid-19 which created further problems, so we are working well with farmers,” said Mr Chigodora.
Explaining the financing structure of Command Agriculture, Mr Chigodora said they secured an overdraft from CBZ Bank to finance participating farmers.
He said Government will come in as guarantor should farmers fail to repay.
Mr Chigodora said they will rope in the Government as a last resort after pursuing all necessary methods and conduct due diligence to understand what caused the farmer to default.
On how the loan is repaid, Mr Chigodora said they submit a stop order facility to the Grain Marketing Board to debit their money from the farmers’ sales. Mr Chigodora said Government had guaranteed the programme to the tune of US$253 million to ensure the scheme succeeded.
Cde Wadyajena inquired why Mr Chigodora was saying they got an overdraft facility from CBZ Bank when an agreement they signed with the Government indicated that financing would come from Government securities and fixed deposits through the Reserve Bank of Zimbabwe.
Mr Chigodora was accompanied by Permanent Secretary in the Ministry of Lands, Agriculture, Fisheries, Water and Rural Resettlement, Dr John Basera.