By KENNEDY MUPESENI –
STANBIC Bank Zambia has urged farmers to make informed decisions using production data and records as well as maximising their management capability as they diversify their production.
Stanbic head of agribusiness Leon Kotze said agricultural diversification holds the key to sustained production hence the need for farmers to make informed decisions.
Mr Kotze said Stanbic had been having a lot of conversations with its customers in the agriculture sector around diversification.
“It is important that farmers also look at their cash flows and gauge the right time to invest in the diversification of their businesses and to ensure that their crops don’t suffer,” he said.
Mr Kotze said this in a presentation at the Copperbelt, Mining, Agricultural, Industrial and Networking Exhibition (CAMINEX) held at the show ground in Kitwe last week.
Mr Kotze said that over the last 10 years, the agriculture sector in Zambia had been maturing, evidenced by above-average production of major crops such as wheat, soybeans and maize.
He, however, sad diversification would ensure they hedged against price shocks.
“The last few years have seen Zambia’s agriculture belt shifting northwards to the Copperbelt’s rural towns such as Mpongwe, as well as parts of North-Western Province that are enjoying appreciable amounts of rain. The Southern and Eastern province belts have suffered lower production due to lower rainfall patterns,” Mr Kotze said.
Mr Kotze said Stanbic’s confidence in the industry had also grown over the last 10 years, with farmers improving their loan repayments.
He said statistics showed that from 2007 to 2009, non-performing loans in the agriculture sector were quite high at above 30 per cent for all bank funding that was channeled to the agricultural sector.
But that between 2010 and 2013 the sector rebounded with improved production and better prices, which saw non-performing loans come down to levels of 10 per cent.
“We take a long-term view on investments that our customers make in the agriculture sector. Whenever we fund we make sure that our assumptions are based on very realistic long-term assumptions,” Mr Kotze said.