Zambia: AGR launches new agricultural funding scheme

African Green Resources (AGR), one of Zambia’s largest input suppliers, at the weekend launched an $81 million financing programme that will provide farm supplies and technology to farmers in exchange for grains. The project comes under the company’s plan to invest up to $150 million in the southern African nation

The project will include the provision of farming equipment, a 50-megawatt solar farm and irrigation dam. It will cover 60,000 tonnes ($55 million) worth of fertilizer for wheat and soy farming as well as $26 million for projects such as the expansion of grain storage silos.

AGR seeks to enhance food security in Zambia and its surrounding regions by investing in 120 commercial farmers and 250,000 small and middle farmers. The project will be financed through regional and global banks, with the loans paid back from the produce the programme yields. It is also guaranteed by the African Development Bank, the African Union, Sace Italy and Agriculture Grain International.

The company is employing a trade-by-barter approach, where farmers will be given farming supplies and technology, and instead of paying back in cash with interest, the debt would be paid with grains. “We will repay the loan from sales of wheat flour, soya processing plant products, and silo revenue,” AGR Chairman Zuneid Yousuf said. The firm will receive 44,000 tonnes of wheat per season, which will be processed before being sold on local and international markets, he added.

With this new initiative, farmers will be able to grow their businesses with the help of access to markets and credit finance without having to worry about repaying debts. Farmers who do not have access to loans can tap into this initiative to grow their businesses.

Zambia possesses a large land resource base of 42 million hectares of which only 1.5 million hectares is cultivated every year. There are abundant water resources for irrigation and the country has 40 percent of the water in Central and Southern Africa.

More so, the agricultural sector is the ‘backbone’ of Zambia’s economy, contributing 35 percent to the country’s total non-traditional exports (other than copper and cobalt), with a 10 percent total earnings for the country. But a drought in the south and west hit the economy recently, lowering 2018/19 agricultural production and hydropower electricity generation.

World Food Programme (WFP) records show that over 45 million people in 16 nations of southern Africa are faced with growing hunger after repeated drought, low yields, widespread flooding and sluggish economic growth.

Nonetheless, AGR initiative will help finance agricultural business and would help in ensuring food security for the country. African countries should take a cue from AGR by involving in a flexible trade by barter credit scheme for farmers. This will help boost the agricultural sector, by encouraging more people to venture into agriculture, and ultimately increase exports and revenue for the country.