Government losing out with Green Schemes

The government is incurring losses because of the agreement under which it acts as guarantor for Green Scheme-affiliated small-scale farmers with Agricultural Bank of Namibia (Agribank) loans. According to the Auditor-General’s report on the Green Scheme programme, the lack of a clause in the tripartite agreement dealing with cases of death or breach of contract by small-scale farmers is detrimental to the State. The report particularly focuses on an audit study done on the Green Scheme programme by the Ministry of Agriculture, Water and Forestry for the years 2009 to 2011. The report, tabled in parliament on Wednesday, states that the current system lacks the means for automatic deduction of loan repayments to the Agribank in some cases, leading to small-scale farmers simply defaulting on their loans, and to government having to come through as guarantor. The report further criticises all Green Scheme projects currently falling under the State, with the exception of the Hardap project, for failing to pay the required lease fees in accordance with their leasehold agreements, leading to even more losses for the State. The report partly blames the ministry for this development, for not undertaking a comprehensive valuation of the schemes and thus determining an appropriate lease fee for the plots. In addition to these losses, the report notes that the ministry has had to take over managing a number of these projects due to non-performance by service providers who entered profit-sharing agreements with the projects. These include the Etunda irrigation scheme in the Omusati Region, as well as Shadikongoro and Uvhungu-Vhungu in Kavango East. This, the report says, led to the government losing out on its 40% profit share following investments in land, farm infrastructure, implements, machinery and equipment at the various schemes. Only one of the seven projects has created a reserve account to guarantee the sustainability of its assets as required by the 2008 Green Scheme policy. The Green Scheme projects were aimed at encouraging the development of irrigation crop production in Namibia, in order to increase food production and create jobs.