The Zimbabwe Commercial Farmers Union (ZCFU) is negotiating with banks to allow farmers to use 99-year leases as collateral so that they can access loans to boost productivity in the horticulture sector.
When the government gave 99-year leases to farmers, there was optimism that financial institutions will accept them as collateral as a way of boosting productivity in the horticulture sector.
According to ZCFU Matabeleland North provincial chairman Mr Winston Babbage, this, however, has not been the case, hence the negotiations between the union and the Bankers Association of Zimbabwe (BAZ) to map the way forward on the issue.
“Well, we are negotiating with a lot of banks and collateral is an issue and we are taking up the issue with the BAZ and see if the 99 year lease becomes acceptable. BAZ is saying it has passed but the banks are not willing to agree on it,” said Mr Babbage.
Production in Umguza where the bulk of the horticultural activities are largely centred has been decreasing, with the big players monopolising the sector in the supply of vegetables such as tomatoes whose price has now dropped from $22 per box to $16.
“You might even be forced to reduce the prices even further because people won’t be buying and the cash-flow situation is also affecting everything,” said Trinidad Sithole, a farmer.
Umguza is one of the major suppliers of vegetables in Bulawayo but the farmers now face stiff competition from bigger players.
Meanwhile, farmers have been urged to take precautionary measures to ensure that that their crop is not affected by frost during the winter season.