By Prossy Nandudu
THE Government has been asked to restructure agricultural financing to benefit farmers. The call was made by Rhoda Tumusiime, the AU commissioner for agriculture at a press conference last week.
Four years ago, the Government set aside a sh30b agriculture revolving fund to be topped up by financial institutions to lend to farmers so as to increase agriculture yields.
However, many farmers have not been able to access these funds.
“By putting aside funds for agriculture financing, the Government is committed to improving the agriculture sector but it has have not come up with structures that will see that money reaches the farmers,” said Tumusiime.
Tumusiime said the Government should not stop at setting up guidelines for farmers but also for commercial banks that lend out the money.
“A structured approach by the Government on how to access the money, ensuring that the agreed interest rates are implemented by commercial banks will be the only way this money can reach the targeted audience,” she added.
She explained that in Ethiopia, the government has put in place a transformation agency that helps farmers to identify credit opportunities and also follow up on its use and how it’s being implemented.
According to the head of agriculture financing at Stanbic bank, Richard Wangwe, financial institutions have been lending money to farmers but adds that not all farmers meet the requirements.
Since banks consider agriculture a risky venture, Wangwe says, they have decided to focus on commercial farmers.
Tumusiime added that the AU has been engaging the heads of central banks in member states to increase funding to the agriculture sector.
AU roots for better agriculture financing