I REFER to the opinion article titled “New farmers require subsidies from government” by John Robertson (Independent, December 8).
I congratulate Robertson for his extremely well-researched document that gave an accurate
reality check to what is obviously a very poorly constructed lease document.
It is clear that anyone with sound, rational business sense would never enter into such a risky venture. No responsible bank would lend finance unless security was available in other off-farm assets.
Security taken over machinery attracts a much higher interest rate than the rates offered on freehold land.
To borrow money at these higher interest rates is often uneconomic in crop or livestock farming.
It is a well-known fact that large sums of money are required to operate an economically sustainable farm unit.
Not in a thousand years will this lease document have the security to attract the borrowings necessary to efficiently run a good farming operation. In fact, this document will only attract those with bad judgement or more money than sense.
In addition to what Robertson says, any potential lessee must realise that the document is not worth the paper it is written on.
The “certificate of no interest” issued by this same regime comes to mind. A substantial proportion of farms in Zimbabwe changed hands after Independence.
Firstly, the vendors had to offer the farm to the government. If the government did not want the farm, they issued this “no-interest” certificate and the owner was free to sell his/her farm to anyone in the market place.
Holders of this certificate soon found out the hard way once the government- sponsored land invasions began. The “certificate of no interest” was not worth the paper it was written on.
So, no matter what the terms of the lease are, this regime never honours any agreement. For those who take up the 99-year lease, don’t say you were never warned.