Tobacco Farmers Facing Problems in Accessing Loans: TIMB

Source from:  herald.co.zw 07/27/2004

TOBACCO farmers are facing problems in getting loans under the productive sector facility, the chairman of the Tobacco Industry and Marketing Board (TIMB) Mr Njodzi Machirori said. Problems regarding the funding of the crop may derail efforts to resuscitate the industry which has been on the decline in the last four seasons. Mr Machirori said despite the disbursement of funds to different banks under the facility, there were many constraints which farmers were facing. "Stakeholders from the industry met this week and it was discovered that farmers were finding it difficult to get the loans. "Loans under the productive sector facility are on a six- month tenure whereas tobacco is an 18-month crop thus there is need to make sure that the tobacco farmers’ case in considered," said Mr Machirori. Tobacco, being a long season crop, cannot be covered under the productive sector facility which is a short-term loan. "Apart from the constraints pertaining to the tenure of the loan facility, we also found that the issue of collateral is coming up. "Banks are arguing that they need security because the risk at the moment lies with them and thus they need to be covered," added Mr Machirori. This has to be corrected at the earliest convenience if the country wants to produce the projected 250 million kilograms of the golden leaf. Preparations for the next crop have already began and such constraints would pull down the efforts to revive the industry. "We have not lost the season yet as we are told that institutions such as the Tobacco Research Board have massive seedbeds for the next season. "These seedbeds plus those from contractors would become handy and this is where our hopes are pinned," added Mr Machirori. Farmers from the eastern region still have until the end of this month to make the necessary preparations while those from the northern region have until August 15 to finalise their preparations. New tobacco farmers are the hardest hit by the delays since it becomes difficult for them to come up with proper financing schemes. They are the ones in need of financial help. There have been changes to the tobacco industry in the last three to four years as the traditionally large scale producers have been replaced by small scale farmers. Small-scale farmers do not have access to other financial resources and they have to rely on such funds as the productive sector facility during their first seasons. Apart from the support from the financial institutions, there have also been some companies which have been instrumental in providing support. The companies contracted the farmers in the last season and they are expected to continue their partnership this season.