Banks on tobacco farming

Banks have pledged to continue funding tobacco farmers as
the sector has proved to be more lucrative compared to
other crops such as maize. Speaking at the National
Dialogue on Agro Business, Food Security and Nutrition on
Wednesday, Bankers Association of Zimbabwe president Mr
Sam Malaba confirmed that there was a shift from funding
maize and wheat towards tobacco that was more lucrative.
He said the tobacco sector was more organised and had a
lower risk as compared to the grains.
"There has been a shift by banks in funding agriculture.
Tobacco is well supported and this has resulted in the
growing number of tobacco growers every year. What is
happening in tobacco contrasts with what is happening with
maize, where loan repayments were considerably uncertain.
Banks are willing to support tobacco farmers through
contractors. The tobacco value chain is efficient and the
stop order system has helped banks recover their money,"
he said.
Mr Malaba said by funding tobacco farmers through
contractors, banks did not have the burden to follow up on
individual farmers as the companies had their ways of
recovering their costs. He commended Government for the
current efforts to raise maize financing through the
Agricultural Marketing Authority bills.