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.
