New shift in agric financing takes shape
Pauline Dikuelo | Wednesday September 2, 2026 06:00
One such endeavour is new administration’s Agricultural Financing Strategy which seeks to shift focus from fragmented, subsidy-dependent interventions towards a market-driven system designed to attract private investment. The initiative was unveiled recently by Minister of Lands and Agriculture, Dr Edwin Dikoloti who said the country must confront a fundamental question, whether it is financing agriculture in a way that will create the sector it wants to build. Dikoloti noted the objective should not simply be to put more money into agriculture, but to establish a financing system that enables the sector to become more productive, commercial, resilient and competitive. 'Our objective should not simply be to put more money into agriculture,' he told those in attendance on Thursday. “Our objective should be to build a financing system that enables agriculture to become more productive, more commercial, more resilient and more competitive,' the minister added.
The ambitious Agricultural Financing Strategy proposes a shift from financing individual farmers in isolation to funding bankable agricultural value chains. Under the new approach, finance would be linked to economic activity, including markets, production, contracts, credible off-takers, aggregation, insurance, infrastructure and visible cash flows. It proposes instruments including guarantees, insurance mechanisms, leasing facilities and risk-sharing arrangements. These are intended to increase confidence among producers and financiers while unlocking investment in productive agricultural activities. Through the shift, government therefore aims to make agriculture more commercially viable while reducing the risks that have traditionally discouraged financial institutions from lending to the sector. Equally, rather than measuring success by the amount of state support channelled into agriculture, the Strategy will increasingly assess whether interventions reduce risk, improve repayment discipline and mobilise additional private finance. Meanwhile, Food and Agriculture Organisation (FAO) Subregional Coordinator and Representative in Botswana, Dr Patrice Talla, said agricultural financing could not follow a one size fits all approach.
Talla stated that smallholder farmers, emerging commercial producers, processors, exporters, cooperatives, youth-led enterprises and agri-businesses have different production cycles, risks and financing requirements. He added successful agricultural finance systems, must therefore provide solutions tailored to specific value chains, markets and customer segments. According to Talla, for Botswana, the Strategy also emphasises strengthening the commercial infrastructure surrounding agriculture. This includes improving aggregation, strengthening off-taker arrangements to create predictable demand and promoting insurance-linked lending. Additionally, mechanisation and irrigation financing, digital solutions, financial literacy and entrepreneurship development are also identified as important components of building a more investment-ready agricultural sector. It has been revealed that under the Strategy, particular attention will be given to reducing financing barriers faced by youth and women entrepreneurs and helping agrifood businesses develop stronger models capable of attracting investment. However, the biggest test will be implementation which will be in phases, with the first six months focused on establishing institutional foundations, conducting diagnostics, addressing legal gaps and preparing pilot programmes.
An 18-to-24-month launch phase will then test the model through three priority value-chain clusters, with successful interventions scaled up and ineffective ones redesigned or discontinued. For their part, Business Botswana officials said the Strategy will be taken to Parliament for approval and proposed quarterly Cabinet assessments of its implementation. A representative of the employer federation, Boiki Tema, told the gathering that Cabinet should approve the initial six-month workplan, establish governance structures, redesign public support mechanisms, conduct a legal-gap analysis, approve the pilot value chains and require quarterly reporting.
He stressed that the Strategy must now move from policy to implementation, with financing decisions starting with the value chain: where is the demand, where are the supply gaps, who are the off-takers and which financial products are appropriate? 'Ultimately, success will not be measured by how much money is committed to agriculture, but by whether that financing strengthens value chains, increases productivity, expands value addition, improves food security and reduces Botswana’s dependence on food imports,' he added .