Business Botswana (BB) has questioned Finance Finance Minister Kenneth Matambo’s assertions in his budget speech that government intends to put more money on the Agricultural Credit Guarantee Scheme (ACGS).
The scheme deals with issues such as farm productivity, food security and agricultural development.
BB communicated its concern regarding the decision by government to inject additional funds to the scheme on the basis that it has yet to prove beneficial especially that it is currently running at a deficit.
It further argues that the decision was made despite the private sector’s proposal to government to privatise the scheme.
“We hope the Ministry of Agriculture will consider recommendations made and accelerate privatisation of this scheme,” it stated.
ACGS is a government-owned scheme and perhaps the contention by BB could also emanate from the fact that public projects have in the past failed to be implemented effectively.
When responding to the recommendation by BB, the Ministry of Agriculture said it would consider the proposal when it is brought to its attention.
The agriculture sector is largely supported by the European market on the sale of beef. However, the country produces very little commercial crop with most farmers producing for subsistence use or to sell locally.
Furthermore, farmers contend with issues of marketing and socio-economic dynamics of the sector such as the remoteness of farms and the difficulty to obtain water.
Commentators argue that the existing agricultural programmes neglect the needs of low-income farmers focusing on established farmers with better knowledge and expertise on farming.
The agricultural sector receives support from a number institutions, among them the Citizen Entrepreneurial Development Agency (CEDA).
However, it appears that the financial assistance offered by CEDA is undermined in part by the inherent challenges of the sector, with sporadic reports of farmers who demonstrate resilience. The agricultural sector is currently under pressure to contribute meaningfully to the economy as part of the diversification drive, but it remains lagging.
The recovery from severe drought which persisted over the past years could provide a new lease to the sector but pundits argue that the challenges go beyond the need for the rain.