On Friday, parliament passed a motion by Member of Parliament for Botletli South, Hon Mokalake, to increase the repayment and grace periods for loans accessed for agricultural purposes. This was done against the will of the Citizen Entrepreneurial Development Agency (CEDA).
Arguing his case in parliament, Mokalake said agriculture is a unique venture that takes much longer to bring about profit.
In that light, he argued that it’s only fair that not only should interest rates for agricultural loans be brought down but grace periods extended as well.
He also argued that those farmers who have already received loans should have their repayment terms rescheduled.
He said unless a generous outlook is turned towards agriculture, the sector was unlikely to make headway.
Since independence agriculture has been on a rapid decline in as far as the sector contributes to the national GDP.
His concern was that CEDA had turned to lump agriculture with all other sector despite the fact that the sector had a long and slow off-take speed.
For the sector to reclaim its position as the country’s economic mainstay, there would be need for a change of mindset and paradigm shift towards it, said Mokalake.
“Agricultural gross domestic products initially was almost 40 percent but has dwindled to 3 percent,” he said, adding that it was largely because farming was a testing and very costly exercise.
Another factor, he said, was a grace and repayment short period a farmer had to abide by, resulting in the collapse of the sector.
Mokalake proposed that the grace period be extended from 24 months to 36 months, while the repayment period should be extended from seven years to 20 years, with interest as low as 3 percent.
He further pleaded with the government to reschedule the failed repayment attempts by farmers
