BY MELODY CHIKONO
Last week, Deputy Minister of Agriculture Vangelis Haritatos oversaw an in-calf dairy distribution handover ceremony through which a batch of 147 in-calf heifers was given to 121 dairy farmers. The event was facilitated by Transforming Zimbabwe’s Dairy Value Chain for the Future (Trans DVC), a project funded by the European Union under the Zimbabwe Agricultural Growth Programme. Senior business reporter Melody Chikono (MC) spoke to Haritatos on other issues concerning the agricultural sector and he said his ministry was working on a number of mechanisms that included cutting on regulation costs as well financing farmers through the soon to be launched land bank to make farming a viable business. Below are the excerpts from the interview:
MC: Can you give us an update on the security of tenure for the dairy farmers?
VH: Basically, about 210 farmers applied for offer letters. Remember security of tenure is very important and has been identified as a major challenge to all dairy farmers. Out of those 210 dairy farmers that applied 130 had been issued the offer letters. Our minister issued the statistics in parliament recently.
What we have done is we have accepted the applications on a case-by-case basis. The minister has issued the offer letters to plus or minus 130 farmers. What we are saying is that all Zimbabweans are entitled to land and we are welcoming any application from a white person ,black person or any race because our constitution is quite clear that any Zimbabwean has right to the land
MC: Can you explain this in relation to the 99-year leases?
VH: Before you get the lease you need to have an offer letter. For you to be a bona fide farmer you are leasing land from the state which is called an offer letter. So after you have an for letter with a good track record of at least five years, you apply through the lands commission and you get recommended for a 99-year lease. If the recommendation comes, then you are now issued with a 99-year lease.
So it’s two different documents, but I think every farmer is leading to the 99-year lease. But for now, if one has an offer letter, it is security enough and one must show the government in the next five years that he or she can produce, then you apply for a 99-year lease.
MC: In the past you indicated that banks had been sticky on the bankability of the 99-year leases. What’s the progress now?
VH: The banks are still sticky on the bankability of the 99-year leases. So now through the land bank, everything will be taken care of because as farmers, if one has an offer letter, they will be able to approach the land bank for a loan.
So the land bank is one of the four pillars that will fall under the new AFC (Agricultural Finance Company) or the new Agribank. The four pillars are the land bank itself, the AFC insurance, the commercial aspect which is the Agribank and the SPV which falls under the tillage services unit .
So there are now four pillars to what was before the Agribank and that would be launched by President Emmerson Mnangagwa next month.
So as we have already stated in the past that we were working on something, this is what I was talking about and His Excellency will launch it in May. We have appointed the boards already and you would have seen in the press a few weeks ago.
The land bank is the bank that will provide the financial need for all the farmers, for all agricultural practices whether they are dairy farmers, crop farmers and so on, that’s where they will be able to access finance using these offer letters and 99-year leases.
MC: How capitalised is this land bank?
VH: Right now that is what we are waiting to hear from the Minister of Finance as to what extent the bank will be capitalised. Also the government will give us some guarantees to the bank for farmers so that those people that have excess funding and other financiers can come through and lend through the land bank. There are multiple faceted approaches that we are taking to be able to lend to the farmers.
So right now it is still very early days, even the bank itself has not been launched but I’m sure by next month when the president will launch the land bank that we will announce the capitalisation of the bank.
MC: So do we have any figures as to how much famers would want in loans?
VH: I think if you ask the farmers the sky is the limit. If you ask me as a farmer I will tell you bigger figures because farming is exciting and I would want to do more. I definitely know that the bank will be capitalised in billions. That is a certain thing and the billions will go into the agricultural sector and that will make agriculture more sustainable and more viable.
Right now the major challenge for farmers is that loans are coming with very high interest rates and very short payback periods. Farmers need long-term loans and the land bank is the answer.
It’s going to be a revolving fund and it’s going to be paid back. Farmers have to acknowledge and realise certainly that farming is a business. So this is not a hand down, it’s not a grant; they are loans that have to be paid back.
MC: So how far are you in terms of the land redistribution, following the conclusion of the land audit?
VH: The land audit came out last year, but we had some challenges with Covid-19. We are following basically the recommendations of the audit. About 16 000 farmers have been audited; some farms were vacant, some were under-utilised and of course some were fully utilised.
So we are saying to the farmers, if they have been utilising their farms they are very safe, and of course we have a mandate of implementing the audit recommendations and that is what we are going to do.
MC: The dairy sector has been facing a number of challenges, including financing and use of antiquated machinery, what are you doing to ensure an improvement on this front?
VH: The challenge is that farmers look towards feed but feed is not the answer. By feed I’m talking about importing feed into the farm. The answer is one’s own farm feed. So farmers should grow their own feed and ensure that the 76% figure on costs they are talking of in terms of feed is grown on the farm.
Make your own silage, don’t burn grass and once you have 80-90% of feed produced on the farm then you will be very self-sufficient and can bring in that small potion remaining as import. The answer is in the very short, medium or long-term.
Like I said, the land bank has to come in for farmers to be very self-sufficient and to cut on imports as well as to capacitate farmers and offer them long-term loans that they require. I mentioned that we are also looking at cutting down costs especially in terms of regulation so that farming becomes viable.
We need to cut down regulations for our farmers. To pay the taxes is important, but producing for our country is more important.
MC: So which ones are you going to cut on?
VH: Basically farmers are complaining about regulation costs, the licences having to go to several offices, there is a cost to it, so we are trying to establish a one-stop-shop so that we have shared duties and that basically the regulation costs themselves where we are trying to make them efficient so we can drop the costs to the farmer as the costs to the regulator will be less.
We are talking to AMD, RDC, the Ministry of Health among others to see how we can drop these costs. So it’s right across all ministries to bring down and cut the regulatory costs to the farmer. So when we talk about ease of doing business it’s also to benefit the farmer. This is immediate and not going to take us very long.
We are working on a number of things including genetics which is important for increased production.