18 August 2017

Zimbabwe: Dairy Sector, Banks in Funding Talks

Photo: Daily News
(File photo).

The Zimbabwe Association of Dairy Farmers (ZADF) has engaged the banking sector in efforts to secure funding for the industry, businessdigest has learnt.

The negotiations come at a time the dairy industry has registered growth in milk production but still falling short of the national dairy requirement of 120 million litres per annum.

ZADF chairman Emmanuel Zimbandu told businessdigest on Wednesday that they are currently in negotiations with financial institutions to secure much-needed funding to boost milk production.

"We are in negotiations with both the Bankers' Association of Zimbabwe and individual banks because it is difficult to grow the dairy industry," Zimbandu said. "The negotiations have been positive but as you will understand that I cannot divulge details of our talks because of their sensitive nature."

Banks have been reluctant to fund farmers who received 99-year leases from government, citing lack of collateral.

Government and banks have held several discussions over the issue in a bid to find a solution and unlock funding for farmers.

Zimbandu said milk production had been affected by the cold spell during the winter period after a surge in production during the period between March and May this year.

He added that there will be another drop in milk production when dairy cows go through their drying periods in October.

The rains that pounded most parts of the country led to the slump in milk production in February.

Milk production increased by 13% to 65 million litres last year compared to 58 million litres recorded in the prior year due to import restrictions and a dairy revitalisation project. According to the Zimbabwe Dairy Industry Trust, the 13% increase in milk production was in line with the target annual growth of 12%. Milk production levels have dramatically plummeted from the early 1990s peak of 260 million litres per year to between 50 million and 65 million litres currently.

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