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Farmers petition Agribank to waive interest

2022-07-15  Kuzeeko Tjitemisa

Farmers petition Agribank to waive interest

The Previously Disadvantaged Namibian Commercial Farmers Union has called upon the State-owned Agribank to waive interest on their farm loans, arguing that doing so would help them recover from a myriad of setbacks.

“The interest write-off for previously disadvantaged farmers on commercial farmland loans, in our opinion, would help to chart a clear path forward in making the farming industry, farming, in general, and land reform, in particular, more sustainable,” the union chairperson Jane Kuhanga said.

She said this in a letter addressed to Agribank CEO Raphael Karuaihe and copied to finance minister Iipumbu Shiimi and agriculture minister Calle Schlettwein, dated 7 July.  

To discuss their situation and requests, she also asked Karuaihe for an urgent meeting within the next seven days.

Agribank’s spokesperson Rino Muranda yesterday said they have received the petition and are looking into it. 

He also promised to get back to the farmers shortly.

Kuhanga said farmers went through a drought of about six years, and this had the effect of reducing the stocking rate to an average of nearly 35% for most of the farmers.

“While the last two rain seasons have substantially alleviated the effects of the prolonged drought on the farmers by completely restoring the grazing conditions, it is far assisting them with the huge burden of bloated loan balance due to the arrears built up during the drought years as well as the level and structures of the rate of interest applicable on commercial farmland loans,” she added.

She said, in the last two years, the world was hit by the Covid-19 pandemic, which had far-reaching declining consequences on the global, regional and domestic economies.

“This year, global fuel price increases are dealing a further crippling blow to farmers. Fuel is the main source of energy on the farms – from the tractors, vehicles and even water pumps for human and animal consumption,” she said.

“Farmers need the interest written off on their outstanding commercial farmland loans to survive the calamities of the last eight years and beyond,” she stressed. 

She said farmers are aware of the situation in the past, where the agricultural bank has taken decisions or the decision to completely write off a facility or scheme it was managing on behalf of the state, simply to relieve the financial burden imposed by the products to the farmers to enhance the development of the sector. 

“It is a common course that a few years ago, the Inland Revenue services wrote off interest on the outstanding taxes for those who had balances due and payable to it,” Kuhanga said.

She said, while they do not have the exact figure, it is reasonable to assume the figure was close to N$1 billion if not more. 

“Recently, the NSFAF announced that it has written off about N$2.1 billion of interest on amounts owed to it by beneficiaries. We believe the above respective actions were taken by the State to alleviate the burdens of debt on the concerned individuals as well as strengthen the implementing institutions,” she said. 

Agribank, through its Affirmative Action Loan Scheme started in 1998, grants loans to previously disadvantaged farmers to acquire farms in commercial areas.

The loans are tailored to meet the needs of emerging commercial farmers and were considered an essential component of the land reform programme. 

In 2017, Agribank said it owed monies over about N$500 million by mostly emerging black commercial farmers. 

The same year, the bank started to list non-compliant farmers with the Information Trust Corporation, claiming they have refused to honour their debts and have continuously ignored invitations to make repayment arrangements.

Ever since, the bank and emerging black commercial farmers have been at each other’s throats, with farmers accusing the bank of not listening to their plight, thereby crippling them financially. -

2022-07-15  Kuzeeko Tjitemisa

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