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Government Issues Plan To Recover Command Agriculture Loans

1 September 2021

The Minister of  Lands, Agriculture, Fisheries and Rural Resettlement, Anxious Jongwe Masuka has announced a plan to recover Command Agriculture loans noting that farmers with outstanding debts will not be enrolled for the 2021/22 farming season. The minister added that banks that lend to farmers who have not fulfilled the requirements stated below will be liable for any defaults. Pindula News presents Mr Masuka's statement that was issued on 27 August 2021.

PRESS RELEASE ON THE NATIONAL ENHANCED AGRICULTURAL PRODUCTION SCHEME (COMMAND AGRICULTURE) LOAN RECOVERIES BY HON DR ANXIOUS JONGWE MASUKA, MINISTER OF LANDS, AGRICULTURE, FISHERIES WATER AND RURAL RESETTLEMENT

1.0. PREAMBLE

1.1. The National Enhanced Agriculture Productivity Scheme (NEAPS), commonly known as Command Agriculture, or Special Agriculture Programme for Import Substitution, initiated in 2016, has laid a solid foundation for ensuring national food security, accelerating import substitution, increasing employment, improving incomes and livelihoods and has provided a basis for broadening agricultural exports.


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1.2. Over 15 000 farmers benefit from this NEAPS annually, while over 2.3 million small-holder farmers benefit from social protection schemes annually. Government will continue to implement the two-pronged approach in financing agricultural activities, with the fiscus focussing 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.

2.0 THE CHALLENGE

2.1. The success of NEAPS is 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.

2.2. 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.

2.3. Unfortunately, some farmers have ignored these Sls and have gone ahead and side-marketed their crops prejudicing contractors and jeopardising repayments to banks that funded the NEAPS. The agricultural transformation we seek should not be jeopardised by these few farmers.

2.4. 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.

2.5. Unfortunately, there are unscrupulous farmers that have been abusing the NEAPS. These farmers are taking inputs and misusing them, while other farmers are not repaying their debts, even if they have capacity to do so.

3.0. WAY FORWARD

3.1. The Contract arrangements for the 2021/2022 season are being strengthened to deter side-marketing, non-performance and under-performance.

3.2. Farmers who have fully paid their debts will be immediately enrolled for the 2021/2022 season.

3.3. Farmers with outstanding debts will not be enrolled for the 2021/2022 season until they have:

3.3.1. Made an immediate payment of at least 50% of the 2020/21 Summer Season total loan amount by September 31, 2021.

3.3.2. Made a Repayment of at least 80% of the 2020/21 Summer Season total loan amount by November 30, 2021.

3.3.3. Signed a commitment with an asset pledge to pay the Programme in full before the onset of 2021/2022 season.

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

3.4. 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.

3.5. 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.

Hon Dr Anxious Jongwe Masuka MINISTER OF LANDS, AGRICULTURE, FISHERIES, WATER AND RURAL RESETTLEMENT

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