Harare — The  Reserve Bank of Zimbabwe has with immediate effect slashed the interest rates for Agriculture Sector Productivity Enhance-ment Facility loans from 50 percent to 25 percent per annum.

This will help cut the costs of funding for agriculture purposes. Reserve Bank Governor Dr Gideon Gono revealed this while presenting his mid-term monetary policy in Harare yesterday. "With immediate effect, the rate of interest under the ASPEF window has been reduced to 25 percent from 50 percent per annum," said Dr Gono. He said the moves was aimed at enhancing agricultural productivity and ensure borrowings for financing farming related activities become attractive. "Farmers should take full advantage of this review and put every inch of arable," Dr Gono said.

The Reserve bank chief said support to agriculture remains a top priority policy initiative aimed at revitalising the mainstay of the economy. As at August 31, a total of $3,9 trillion had been disbursed under Aspef to 21 940 applications. Aspef loans are distributed through the State-owned Agribank and other commercial banks.

The central bank came up with a special interest rate for farmers as the prevailing market rates had become too prohibitive, making borrowings unattractive. This had some ripple effects on maximum utilisation of land, particularly the land allocated to new farmers under the Government land reform programme. "Lasting growth in the agriculture sector can only be achieved through effective utilisation of all allocated arable land," he said. Meanwhile, phase two of the Agricultural Mechanisation Programme will be launched next week. Under phase two, focus would be placed on meeting the logistical and technical needs of A1 and communal farmers and giving additional support to A2 farmers.

"We wish to underscore the fact that these programmes are non-partisan, as is the case with all other Reserve Bank programmes and facilities," said the governor. "Beneficiaries will be drawn from across the country's broad array of farmers, without regard to their political affiliation, gender, race, religion or any other differentiating criteria other than possession of land, supported by a history of documented utilisation."

Phase one of the programme was officially launched by President Mugabe in June and largely targeted selected A2 farmers. Some legislators and senators from both Zanu-PF and opposition MDC were among the beneficiaries.

Under the phase one, Government distributed farming implements comprising 925 tractors, 35 combine harvesters, 586 disc ploughs, 465 disc harrows, 70 vicon fertilizer spreaders, 241 boom sprayers and 71 planters, imported under the US$25 million Farm Mechanisation Scheme.