By Mbatjiua Ngavirue
All the evidence points towards the fact that Agribank’s Affirmative Action Loan Scheme is not achieving the objectives of empowering emerging black farmers or redressing the racially skewed land distribution in Namibia.
Instead, affirmative action farmers feel the scheme subsidizes historically advantaged white farmers.
The reality is that the scheme made it possible for white commercial farmers to sell their farms at highly inflated prices – way above the productive value of the land.
They collected handsome cash lump-sum payments, but by using black fronts to repurchase the farms under the AALS still continued farming by hiring farms from the new black owners.
The 35% government guarantee, which Agribank covertly turned into a cash subsidy, went directly into the pockets of white commercial farmers instead of affirmative action farmers.
They have continued to enjoy the resources from ffirmative action farms such as wood, charcoal and wildlife products, which they buy at rock-bottom prices because they dictate the prices and control the market.
Affirmative action farmers feel that the AALS has become a classic case of “having your cake, and eating it”, for white commercial farmers.
There is a long list of problems so far identified with the AALS, among which are:
?The 35% government subsidy has caused massive inflation in farm prices, making it impossible for AA farmers to repay the loans through bona fide farming activity.
?With the full knowledge of Agribank, AA farmers received loans to buy farms with too little breeding stock (cows) to make it possible to service the loans.
?For years, both Agribank and the government have known the entire scheme is a very dysfunctional programme.
?Agribank has dropped all pretences, and now deals directly with white farmers when collecting its money, leaving AA farmers as meaningless, voiceless non-entities in the equation.
?Part-time AA farmers – including married couples where both partners are high-income earners – are also disillusioned with the scheme. High farm prices, interest rates and repayments mean all their hard-earned income from their full-time jobs disappears into the bottomless pit of the farm.
“The people we left behind in Okamatapati are leading a better life than we are. They are prospering while we are just becoming poorer and poorer,” one AA farmer said.
The Parliamentary Standing Committee on Economics, Natural Resources and Public Resources as well as an independent study group have both studied and made recommendations on how to improve the AALS.
On many issues surrounding the scheme, the two bodies arrived at similar conclusions, but their conclusions diverge on some major aspects.
The independent study was fairly scathing about the interest subsidy government pays to AA farmers, covering the difference between the subsidized rate and long-term interest rates.
The intention was, of course, to help reduce the financial burden carried by both full-time and part-time affirmative action farm buyers.
“After thorough analysis it was found that the interest subsidy did little to reduce the financial burden of the various farmers because they all lacked the means of production to properly service their loan obligations towards the bank,” it found.
Furthermore, the report felt the interest subsidy was not only a waste of scarce government resources but also did not contribute to national food security, as the farms remained unproductive in the long run.
The Group’s report cited the example of one AA farmer, granted a loan of N$1??????’??