Farmers under agriculture command who failed to repay their loans at the end of last season due to drought and the Covid-19-induced nationwide lockdown, received huge relief after the government took down extended the repayment period for another three years.
This means that the debt has been restructured and farmers will have to pay it back in three installments for the next three seasons.
CBZ Agro-Yield Managing Director Mr Walter Chigodora said this last week during oral testimony before Parliament’s Portfolio Committee on Land, Agriculture, Fisheries, Water and Resettlement rural.
The committee, chaired by the legislator of Gokwe Nembudziya, the mayor of Cde Justice Wadyajena (Zanu PF), wanted to know the funding structure of the program.
“We have restructured the debt to last three years, so the loan will now have to be repaid in three years. So we divide the debt into three (seasons) and that will also ensure that we don’t create a burden on the treasury. Said Mr. Chigodora.
Lawmakers had asked what the financial institution was doing to those who failed to repay due to drought last season.
They also wanted to know if the government had intervened to save the defaulters given that Mr. Chigodora had indicated that the Treasury was intervening as guarantor of the regime.
“Besides the drought, there was also Covid-19 which created other problems, so we are working well with the farmers,” Mr Chigodora said.
Explaining the funding structure of Command Agriculture, Mr. Chigodora said he obtained an overdraft from CBZ Bank to fund participating farmers.
He said the government will come in as a guarantor if the farmers don’t pay back.
Mr Chigodora said they would go to government as a last resort after applying all necessary methods and conducting due diligence to figure out what caused the farmer’s default.
On how the loan is repaid, Mr Chigodora said they were submitting a stop order to the Grain Marketing Board to debit their money from farmers’ sales. Mr. Chigodora said the government had guaranteed the program to the tune of US $ 253 million to ensure the success of the program.
Cde Wadyajena asked why Mr. Chigodora said he had obtained an overdraft facility from CBZ Bank when an agreement signed with the government said the funding would come from government securities and term deposits through the Reserve Bank of Zimbabwe.
Mr. Chigodora was accompanied by the Permanent Secretary of the Ministry of Land, Agriculture, Fisheries, Water and Rural Resettlement, Dr. John Basera.