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Automated valuation model for livestock appraisal in loaning practice
37-42Views:263Actualization of loan security (mortgage) value is of major importance in Hungarian loaning practice. Due to the recession in economics, the value of agricultural portfolio of banks has decreased a great deal, though not to such a great extent as other branches of the economy. Depreciation of estate stock is compensated with additional collateral security. Besides other stock, often temporarily and out of necessity, livestock is presented as additional collateral security. From the loaners’ point of view, however, the registered inventory value does not guarantee security. The authors have set up an appraisal method giving professional guidance through automated valuation as to how dairy stock can be used as mortgage for loan security. Hereby we are to present the details of both the theory and the methodology of a model that is appropriate for the valuation of dairy livestock on an MS Excel basis. Thus, the process is fast and has more prospects for all parties in the loaning or leasing business. The method involves the features of livestock technology, the expected realized profit, and breed stock value. By the implementation of this method, the loaners can calculate the value of loan recovery (loan to value) with acceptable security.
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The status of agricultural financing by commercial banks in Zimbabwe
45-56Views:642Agricultural finance is indispensable for enhancing productive capacity in both small-scale and commercial farming. This study sought to establish the current status of agricultural financing by 12 registered and operational commercial banks in Zimbabwe in the year 2019. Questionnaires and interview guides were used to collect data. SPSS and NVivo were used for data analysis. All the commercial banks participated in agricultural financing with an average agricultural loan portfolio of 30%. However, their participation in agricultural lending is yet to reach the pre-land reform maximum of 91.3% attained in 1999. Land tenure and weather risks, as well as lack of collateral among farmers reduced the banks’ appetite for lending to the agricultural sector. The majority of the commercial banks offered value chain finance, invoice finance, overdraft facilities, and term loans to agricultural sector clients that mainly included; suppliers, medium-scale, and large-scale commercial farmers. The study established a mismatch in the demand and supply of loans in the medium to long term tenure range of 1 to more than 3 years. There was low demand for 1-3-year tenure loans according to the commercial banks, and a corresponding deficit in the supply of highly demanded longer-term loans of more than 3 years for capital expenditure (CAPEX). Therefore, government should aim to; stabilize currency; arrest hyperinflation; restore economic stability; address land tenure to ensure the bankability of the 99-year Lease; and create an environment that is conducive for investment in climate and weather resilience infrastructure. Local farmers should also invest in human and physical capital to improve their access to bank credit.
JEL Code: Q14
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SOCIO‑ECONOMIC DRIVERS AND INSTITUTIONAL CHALLENGES OF TOBACCO CONTRACT FARMING PARTICIPATION IN SVOSVE COMMUNAL AREA, ZIMBABWE
Views:49Tobacco remains Zimbabwe's Leading agricultural export crop, increasingly produced under contract farming arrangements. While contract farming offers inputs, technical assistance and assured markets, concerns persist that benefits are skewed towards merchancts rather than smallholder farmers. This study investigates the determinants of smallholder participation in tobacco contract farming in ward 22, Svosve communal area, Marondera District, Mashonaland East Province. Guided by the New Institutional Economics(NIE) theory, which emphasises the role of institutions in reducing transaction cost under market imperfections, a mixed methods approach was employed. Quantitative data were from 246 communal tobacco farmers using qestionnaires, while qualitative insights were gathered from 10 key informant interviews with agricultural business advisory officers(ABAO), tobacco merchants and farmer leaders. Multistage sampling was used select 5 villages;Mere 1, Mere 2, Mere 3, Neshamba and Bonda. Data were analysed using descriptive statistics and multiple linear regression in SPSS version 25. The statistics revealed that contracted farmers had higher education levels(10 years), larger landholding(mean 2.1 hacters) and greater access to irrigation(65%) than their counterparts. The regression model was statistically significant (F = 24.73, p < 0.001) with a strong explanatory power (R² = 0.68; Adjusted R² = 0.65). Results showed that landholding size (β = 0.62) and years in contract farming (β = 0.45) were the strongest positive predictors of participation, followed by irrigation access (β = 0.38), household income (β = 0.31), and education level (β = 0.29). In contrast, multiple income sources (β = -0.27) and years in general agriculture (β = -0.27) negatively influenced participation, indicating that diversified and highly experienced farmers were less inclined to join contracts. The discussion highlighted that resource endowments and institutional support drive participation, while lack of collateral and financial literacy hinder broader inclusion. The study concludes that contract farming remains a viable pathway for smallholder integration into value chains but requires reforms to ensure equitable benefits. Policy implications emphasize collateral support, farmer training, and resource provision particularly land development and irrigation infrastructure to enhance participation and productivity among smallholder farmers.
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The global financial crisis: Implications for capital to agribusiness
59-62Views:329The global economy has continued to experience lingering effects of the global financial crisis that began in 2007. Although attention was initially given to the liquidity crisis and survival of some the world’s largest corporations and institutions, the financial crisis is likely to have long-lasting implications for agribusiness. As the world slowly recovers from the crisis, another round of problems are emerging as governments and international institutions attempt to unwind the positions they took in an effort to prevent the global economic bubble from bursting. Perhaps the most problematic factor for businesses is access to capital in sufficient amounts and at affordable rates. Governments and institutions, particularly in the United States (U.S.) and the European Union, have increased their financial obligations as the result of activities taken to curtail the economic crisis. These financial obligations and the associated financial risks place pressure on financial markets and tend to restrain the availability of capital and increase the cost of capital for businesses. However, the U.S. agricultural credit market has not experienced problems to the same extent as general business (commercial and industrial) and real estate credit markets have. In general, U.S. farm businesses have a strong balance sheet, adequate repayment capacity, sufficient amount of assets to offer collateral for loans, and reasonable profits. Thus, U.S. farm businesses have had an ample supply of credit at relatively low interest rates.
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