RUNDU - The Agricultural Business Development Agency (AgriBusDev) will lease out the Ndonga-Linena irrigation project in Kavango East, Orange River irrigation project (ORIP) at Aussenkehr in the south of the country and the Kalimbezi irrigation project in Zambezi which produces rice.
According to AgriBusDev managing director Petrus Uugwanga, the decision on which model to operate the farms – whether leasing, direct management or profit-sharing – was made by the Ministry of Agriculture, Water and Forestry.
“So, for us the decision was taken and we were just directed to implement it, but over and above that we understand the issue is to do with the alignment of responsibilities and also sort of a cost cutting measures on the side of the public institution. We remain concerned, so our approach is to direct the company that will be operating there to ensure minimal job losses,” Uugwanga said.
He said whoever will operate these projects should get them to a level where the agency expects them to be. “For us the issue was really the funding of this project – these projects were never fully capitalised in the beginning and again after the fall army worms in 2016 and 2017 they was never sort of any proper capital injection to bring them to optimal production level,” he said.
Currently AgriBusDev has already leased out three green schemes, namely, Shitemo in Kavango East, Musese in Kavango West and Mashare in Kavango East to private operators.
The motivation behind such leases is because the agency is unable to put them on production optimally, highlighting constant lack of funds for production and operational costs.
“We are not at optimal production. Like for ORIP there’s a need for further development; the area that we are operating on is 200 hectares and the farm itself is 600 hectares and a lot of hectares are not being utilised and this goes for many of our projects, we don’t have money to develop them further to put them on optimal production,” noted the AgriBusDev MD.
It is expected that when these projects will be leased out, food production will continue at optimal production levels and they will continue to employ people who will hopefully contribute to national food security.
“We will be supervising these projects – as you have heard some of the companies that leased some of our projects tend to mess up, we don’t want that to happen, but leasing them out is not a panacea, it’s not a magic bullet, it still needs to be controlled,” he said. Uugwanga noted that government through AgriBusDev is unable to fully utilise these projects and thus needs private operators with investments to fully put them on full production. “Yes the point is if you have facilities that you are not optimally putting under production then there is no point for you to remain under production. It’s either you fully capitalise the business and bring it into optimal production, otherwise the overhead cost will wipe you out of the business, and you won’t be able to afford the operational cost and that is probably the basis on which the ministry decided to lease out some of these facilities,” Uugwanga said.
“What stands between us doing good or bad is the required financial injection, and over the past years of course funds have been channelled into the green scheme projects and people have been talking about it and saying a lot of money has been pumped into the green schemes, but what people don’t get is that it was always pumped into the capital projects but not the operation.”
He said critics always miss the point on the issue. “The funds that were advanced to us went into capital projects development, the expansion of projects like Uvungu-Vungu dairy, Liselo project, establishment of Sikondo project and Etunda. All this money went into capital project development; on the budget they say the figures went to the green scheme but in fact less goes into production.”