21 February 2014

Zimbabwe: Government Abandons Land-Grab Beneficiaries

Government has all but abandoned beneficiaries of its controversial land grab exercise, telling them to approach the banks as it will not fund this year's winter crop season.

Reports this week said agriculture minister Joseph Made revealed to the Senate that the A2 farmers should not look forward to any assistance from the government this year.

According to The Source online newspaper Made said: 'The financial resources are limited. There will be no support for A2 farmers. Go and kneel down in front of your banks.' Made added that the government is currently paying back companies it owed for inputs, particularly fertilizer companies to whom it owes millions of dollars.

This must have come as a blow to the A2 farmers who the government has been supporting with inputs and equipment for about a decade. The A2 farmers are large scale farmers who were awarded the land seized from white commercial farmers under the controversial government exercise.

Economic analyst Masimba Kuchera said the development was symptomatic of the broader financial problems faced by the government. Kuchera said the government 'clearly does not have money.' He added: 'It is a systemic problem cutting across the sectors. If there is no money to pay teachers then what it means is that there is no money to finance agriculture.' Kuchera said the farmers will find it difficult to obtain money from the bank because the banks view the A2 farmer as 'risky business.'

When the government seized the land from its original owners, the white farmers still retained the title deed, the legal document that gave them ownership of the farm.

The government then just handed out bits of land to various people and there has been no land audit, so no one knows who legally owns what.

It has been reported that the ZANU PF government has handed out some 99 year leases to A2 farmers in the belief that they will then be able to source loans from the banks. But these leases show that the land officially belongs to the state and so banks will not lend money to an individual who has no collateral to back up the loan.

It was reported last December that a ZANU PF report, made available to the party's conference in Chinhoyi, said the farmers will have to wait before they use the land as security for borrowing loans. According to reports ZANU PF fears that if it converts the 99-year leases into 'tradable security' that would make it easy for the white commercial farmers to regain their seized land.

Last month Bankers Association of Zimbabwe president George Guvamatanga told legislators at a post budget seminar that money held by the banks belonged to depositors and it would be wrong to lend it to farmers based on a 99 year lease which he said exposes banks in the event of defaults on repayment.

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