33
Table 1.12: Credit by number of farms, Zambia National Commercial Bank
|
Total farming units (#) |
SSF (#) |
ECF (N) |
LCF (N) |
C (#) | |
|
1987/88 |
1,374 |
1,266 |
- 100 |
5 |
3 |
|
1988/89 |
2,340 |
2,142 |
180 |
10 |
8 |
|
1989/90 |
2,737 |
2,500 |
200 |
20 |
17 |
|
1990/91 |
1,239 |
1,100 |
84 |
38 |
16 |
|
1991/92 |
1,140 |
1,015 |
60 |
45 |
20 |
|
1992/93 |
1,197 |
1,025 |
52 |
79 |
41 |
SSF =small scale farmers. ECF =emergent commercial farmers. LCF=large commercial farms. C=corporate
companies.
Source: Zambia National Commercial Bank.
These structural developments in the financial market have important implications for future
title demand. Should agricultural lending by banks stagnate in the new private market era, then a
strong case can be made for the emergence of credit rationing to titleholders. In Kenya, for example,
it is nearly impossible to get an agricultural loan without title, but roughly 2 percent of titleholders
get credit. Once one moves out of the registered former white highlands in Kenya, and the areas of
large-scale commercial farming, the use of commercial credit declines sharply for a number of
reasons: economies of size in mechanization and demand for intensive capital investment by large
farms; the diseconomies associated with smallholders gaining access to credit; and the difficulty banks
have had in foreclosing on leasehold properties in rural areas. There are preliminary indications that
credit demand is beginning to outpace credit supply in Zambia. While Lima Bank, for example,
extended K8 billion in credit in the last season, it received applications for more than K20 billion.
Should the pace of title issuances outpace the growth in credit supply, future credit access will
depend heavily on three factors: title ownership, farm size, and non-farm incomes or other forms of
collateral that banks might use as a guarantee. Larger farms with title and other sources of capital will
continue to get credit. But small "emerging" farmers will be squeezed on the one hand by tenure
insecurity from lack of title (due to administrative bottlenecks), and on the other by lack of capital that
is necessary to undertake the land improvements to make farming profitable.
VII. Proposed land policy reforms
A. MMD Manifesto
The MMD government in its manifesto called for the following reforms in its land policy:
The MMD shall institutionalize a modern, coherent, simplified and relevant land law
code intended to ensure the fundamental right to private ownership of land as well as
to be an integral part of a more efficient land delivery system. To this end an MMD
government will address itself to the following fundamental land issues. A review of
the Land (Conversion of Titles) Acts of 1975 and 1985, the Trust Lands and Reserves
Orders-in-Council of 1928-1947, the Land Survey Act, and the Town and Country