New Loan Scheme for Farmers Coming

By Kalata News,

 

LUSAKA – ZAMBIA is this farming season expected to launch an agricultural loan scheme for small scale farmers so they can improve their agricultural output in the farming season 2023/2024.

.

The loan scheme called the Sustainable Agriculture Financing Facility (SAFF), will have a value of between K13,000 and K70,000 for farmers growing crops on one hectare to five hectares of land.

Announcing the new loan scheme in parliament recently, Minister of Agriculture  Mr. Reuben Mtolo said the SAFF will initially empower small scale and medium scale farmers as a direct boost to rural job creation, improved agricultural yields and an improvement in the national food security.

“Government through the Agricultural support programmes intends to produce by 2027 10 million metric tonnes of maize, one million metric tonnes of wheat and one million metric tonnes of soya beans in order to meet both domestic and regional demand, and to make Zambia a hub of wheat, maize and soya beans production,” said the Agricultural Minister.

The minister said the SAFF loans will be disbursed to maize farmers cultivating less than five hectares in the 2023/24 season. In the years to come, the loan facility will then be up-scaled to include farmers growing soya beans and wheat.

Mr. Mtolo said the SAFF loans will be distributed as farming implements through agro dealers to farmers who are not part of the farmer Input Support Programme (FISP) or the Farmer Support Programme (FSP). The loan scheme will be administered by local banks and other financial institutions near the farmer.

The terms of the loans include a 12 percent interest payable in cash at the end of each farming season and a commitment to sell to the Food Reserve Agency (FRA).

Zambia’s agriculture, according to the European Union, represents the backbone of its rural economy and could significantly contribute to economic diversification and growth. About 60 percent of the population depends on agriculture for their livelihood and a large subset of this group is poor.

“Despite declining contribution to the gross domestic product (GDP), employment in the agricultural sector remains high, but with a low level of labour productivity resulting from unskilled subsistence agriculture, lacking access to productive assets and market opportunities,” says the European Union in their Multi-Annual Indicative Plan for 2021 to 2027 for Zambia.

In the recent months, the Zambian economy has experienced high cost of maize and maize products leading to the Zambian government suspending maize exports. The Government has also hired the Zambia National Service (ZNS) to produce staple food mealie-meal and sell it at a cheaper price in order to force down the national maize meal price. The ZNS maize meal is sold at between K30 to K50 less than the commercial maize meal.