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Monday, 04 February 2019 05:07

Agricultural commercialisation needs combined efforts – Nankhumwa

Written by  Yamikani Yapuwa

Blantyre, February 4, 2019: Ministry of Agriculture, Irrigation and Water Development has expressed need for concerted efforts for the agricultural commercialisation to be successful in the country.

Agricultural Commercialisation Project (AGCOM) Coordinator in the ministry, Ted Nankhumwa made the remarks in Blantyre during an interface meeting with the private sector aimed at strategising on the project.

“The project is taking a different approach as we are looking at sustainability beyond the project phase. Previously, most projects only focused on producers.

“However, for sustainability of this project, we identified the role the private sector plays. These are providers of different services in the value chain including farm inputs, retailers, exporters and financial institutions that render different services including loans,” said Nankhumwa.

Agricultural Commercialisation Project is an initiative which aims at transforming the agriculture sector into a high productive commercial division by among other things, by empowering agriculture cooperatives.

Nankhumwa said the project would capacitate the producers by increasing production as well as instilling in them a notion that agriculture is a viable business.

“At the moment, the smallholder sector is only using 30 per cent of their potential but we hope the project will increase productivity so that the agricultural sector improves both in terms of labour and land productivity,” Nankhumwa said.

He added that the project would also be providing tailor-made loan facilities to specifically address concerns of commercial banks considering that farmers belong to a risky category.

“We will be guaranteeing the credit that commercial banks will be giving to identified producers and other value chain players.

“We also want to change the approach to things by instilling in farmers the need to take their loans seriously to deal with the issue of default,” he said.

Director of Agricultural Planning Services in the ministry, Alex Namaona ruled out possibilities of the project failing, saying it is being implemented by an independent Project Management Unit.

“The project management unit is charged with the responsibility of overseeing day-to-day project implementation, monitor progress and coordinate and account for utilisation.

“We will also hire a private institution that will be manning some components of the project, therefore, ruling out elements of project failure in this particular case,” added Namaona.

Senior Relationship Manager for FDH Bank, Frank Nakoma said the project provides business opportunity for the sector as it will also give a guarantee to banks to extend funds to farmers to enhance their production.

“The project is exciting, as banks, we look at agriculture as one of the important sectors contributing to the country’s economy. 

“However, most of the banks look at it as a risky area but the introduction of the guarantee restores the confidence of banks to extend funding,” said Nakoma.

Ministry of Agriculture in collaboration with the Ministry of Industry, Trade and Tourism are implementing a $95 million (about K70 billion) AGCOM project with a loan from the World Bank. The project will be implemented country wide for six years form 2018-2023.