Agri entrepreneurs unable to secure offtake agreements

16 December 2021 | Agriculture

STAFF REPORTER

WINDHOEK

Despite the cashflow financing option offered by Agribank under the Women and Youth Loan Scheme, agriculture entrepreneurs are unable to sign offtake agreements with potential buyers of their produce.

Agribank says this emerged from its recent countrywide stakeholder engagement sessions on the scheme.

The cashflow lending facility, intended for unemployed agriculture entrepreneurs, requires clients to provide a valid offtake or supply agreement based on the project’s cashflow projections.

This agreement is a commitment between the farmer, who is the producer, and an offtaker, who is the buyer of the produce, whereby the farmer commits to supply the produce and the offtaker pledges to buy the produce from the farm.

Quality concerns

Agricultural entrepreneurs stated during the interactions that potential buyers are hesitant to enter into such agreements due to uncertainty about the consistency of delivery, quality of the produce, and unsorted produce in terms of sizes and quality.

Agribank therefore urged potential buyers to support the intervention as they are key in the process of growing the local agricultural sector.

“Thus, Agribank is encouraging buyers or offtakers such as retailers to assist farmers with such agreements to fulfil the Grow at Home Strategy of government.”

Agribank also urges agri-business owners to work hard and meet the required standards of the buyers through various arrangements such as joint ventures when it comes to supply consistency concerns.

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