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ZIMBABWE: Huge farming loan facility launched, but sceptics want to see the money
IRIN News
May 20, 2005

http://www.irinnews.org/report.asp?ReportID=47221

JOHANNESBURG - Analysts have welcomed the Zimbabwean government's announcement of loan facilities totalling over US $700 million for the agricultural sector, aimed at ensuring greater food security, but are questioning the sourcing of the funds.

"Zimbabwe has no money - we have no production," commented Dennis Nikisi, economics professor at the University of Zimbabwe.

Reserve Bank governor Gideon Gono announced an Agricultural Sector Productivity Enhancement Facility (ASPEF) of more than $500 million in his quarterly review of monetary policy on Thursday. Under the ASPEF, farmers will be able to access loans at 20 percent interest.

The governor also announced a facility of over $200 million to improve agricultural infrastructure. The official The Herald newspaper quoted Gono as saying that the success of agrarian reform strongly depended on the country's ability to revive its agricultural infrastructure.

"While we can appreciate the governor's concern, and attempts to capacitate the farmers ... where will we get that kind of money from?" asked Nikisi.

The Zimbabwe Farmers' Union (ZFU) said that if the funds were available, the initiative was very welcome.

"Many new farmers are trying to cope with farms where most of the infrastructure, like irrigation pipes and water pumps, were vandalised when the old owners left - we desperately need to improve our irrigation system," said Tafireyi Chamboro, ZFU's chief economist.

Gono reportedly announced that almost half the $200 million earmarked for agricultural infrastructure would be used to purchase irrigation equipment and replace water pipes.

With this intervention, government intends to plant maize on 300,000 hectares, devote 150,000 hectares to winter wheat and 100,000 hectares to other cash crops, such as tobacco, potatoes and paprika, said local reports.

Zimbabwe's agricultural sector was thrown into disarray by the controversial fast-track land redistribution programme that began in 2000, when white commercial farmers were removed from their farms to make way for black settlers, who received little government assistance.

The chaotic land reform programme accelerated Zimbabwe's economic decline, critics have noted.

According to UN agencies, when measured against a five-year average, food production in Zimbabwe has fallen by more than 50 percent, due partly to the effects of drought. The situation has been compounded by the marked reduction of the large-scale farming sector, which produced only about one-tenth of its 1990s output.

There has, however, been suggestions from government that former commercial farmers with skills, particularly in the dairy, horticulture and tobacco sector, would be asked to return to the land.

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