Zim: Agriculture reforms sow seeds of debt
A parliamentary report has revealed that the state owes more than $200-million after financial bungles.
The government is failing to account for more than $200-million worth of equipment given to the country’s farmers and some members of the army because of poor accounting in the agricultural ministry.
Auditors have also expressed doubt that government-sponsored equipment and implements reached all of the intended beneficiaries.
According to a parliamentary public accounts committee report, although the farmers are supposed to pay for what they received under the government programme, they did not sign contracts so they are not servicing any loans.
As part of its agricultural programmes to boost new farmers, the government handed out fertiliser, maize seed, tractors, ploughs and other implements to beneficiaries of its land-reform exercise.
The parliamentary report says that, as a result, the government owes China $200-million, Iran $13-million and local seed houses nearly $4-million. The report says there is a real danger that the government might fail to recover the funds owed by the farmers.
The report also says a recent audit at the ministry established that since 2009 the agriculture ministry had an outstanding debt of $3.7-million, which was accrued in 2008 and related to the supply of seed by some companies.
The names of the people who benefited from the government’s largesse were also not disclosed, something the auditors also complained about.
Some of the debt was incurred under an operation code-named Maguta/Inala, which was spearheaded by the army.
Reports at the time suggested that, following years of poor harvests that were blamed on the government’s chaotic land-reform process, security forces were of the view that food insecurity was the major threat facing government.
So, government sought to boost agricultural production by involving the army in farming activities. Soldiers were given seed, farming implements and diesel to farm state land and the produce was taken to the state firm, the Grain Marketing Board.
In some cases, they used tractors to plough for villagers to help to improve their yields.
But the operation failed to end food shortages in the country or ensure the resumption of exports, with analysts saying the targets were missed primarily due to poor planning.
“Without knowing those who benefitted from the inputs, it will be very difficult to rule out possibilities of [the] abuse of public funds and, as such, the facts of the matter should be investigated by the ministry [of agriculture] and be fully accountable for public funds,” reads part of the report.
It adds that failure by the government to pay the long-outstanding debt to seed companies jeopardises the government’s creditworthiness meaning that in future it may not be able to access such credit.
The huge debt also cripples the operations of the seed companies and in turn compromises the country’s food security, the MPs’ report added.
The committee says an audit had observed that in 2009 the agriculture ministry under Joseph Made had not disclosed an outstanding loan of $13.8-million obtained by the Agricultural and Rural Development Authority parastatal from Iran, which was guaranteed by the government through the same ministry. The parastatal falls under the agricultural ministry.
There were also further guarantees for similar loans worth $19-million in 2010 to the Grain Marketing Board that were also not disclosed in the 2010 return submitted for audit. The amounts are still outstanding.
Contacted for comment, Made said he would respond to the report in Parliament.