Nico Orgo seeks $7m for agric funding

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Nico Orgo Fertilisers plans to raise $7 million through the issuance of agro-bills to finance agriculture production for the 2012 to 2013 season.

The bills are being issued through Interfin Bank in multiples of $10 000 and have a tenor of 365 days.

Nico Orgo intends to raise $7 million through the issue of a local registered agro-bills to finance agriculture production for the 2012/2013 season, said Interfin Bank in a statement.

Nico Orgo is one of the leading companies that has been exploiting the organic fertiliser reserves commercially.

Offer for bids opened yesterday and will close on January 30.

At the end of last year the Agricultural Marketing Authority and CBZ Bank failed to raise an initial $50 million through agro-bills after just over a third of total bids were allotted.

A total of $17,7 million was raised after $31,9 million, which showed bills were under-subscribed.

The government and private sector players have been exploring various funding mechanisms aimed at boosting the countrys agriculture production.

Analysts contend that tight liquidity on the markets will result in most agro-bills being undersubscribed.
In his 2012 Budget presentation, Finance minister Tendai Biti said the agricultural sector required at least $2 billion annually to realise its full potential.

In this regard, the projected growth in agricultural production of 11,6% in 2012 takes account of the number of financing facilities established by the government, the banking sector, co-operating partners, seed and fertiliser suppliers, in support of the preparation for the 2011/2012 agricultural season, he said.

Agricultural sector output is expected to increase this year with tobacco, maize, cotton, soyabeans and poultry being the drivers.

In a bid to improve the mobilisation of funding for the agricultural sector, Biti has since proposed a three-year rolling financing strategy from 2012 to 2017 in order to enhance farmers planning and preparedness.