SA FARM INPUT SUPPLIERS PRICE FIXING HAUNTS SWAZI FARMERS

MBABANE – The price fixing scam that doubled the price of farm inputs in South Africa cost the Swaziland Farmers Cooperative Union (SWAFCU) a fortune.

SWAFCU, has since 2006, been battling with repayment of E3.8 million loan sourced from the Finance Development Corporation (FINCORP).
SWAFCU President Musa Sibandze recounted how during the 2006 farming season they could not afford to plough their fields due to the increased cost of inputs that was sudden. He said it was during this period that SWAFCU was mandated to ensure that all farmers accessed farm inputs through a guarantee by government to access a loan from FINCORP which empowered SWAFCU to procure fertilisers from SA.

Sibandze said the inputs came through but the season was no longer viable to plant which made the fertilisers to be underutilised and not sold that much. The following year, fertilisers were busted for a price fixing game and were fined SA and they were also forced to compensate farmers in that country their millions of rands that they had lost through the unethical act.

Sibandze said in the country, all the sheds were full with the stock procured at a very high price. When the ploughing season came, fertiliser prices dropped from about E650 per bag to about E270 per bag.
“The board tried all possible means to engage all relevant structures to get redress of their case including competition commission but SWAFCU could not be assisted, as it was said we are in another country unfortunately we need to write the loss into our books of accounts.

On the other hand, the loan from FINCORP was fixed at a flat rate of 17 per cent per annum,” Sibandze recounted. He said cooperatives were called to meetings as they were the ones who had been given the stock and it turned out that they had also given their members the stock on credit due to the high prices and drought played its game in their hands which fueled the whole situation. Since then, cooperatives tried all possible means to recover the smaller amounts that were owed by their members to repay the loan and that has been ongoing for about 10 years.

“All that could be paid was interest of the loan. Out of the E3.8 million loaned to SWAFCU, about E2.9 million has been paid back, leaving a debt of about E4.9 million to be paid by farmers. This has been a very taxing exercise in our lives at SWAFCU and due to many factors it proved impossible for the poor farmers to exhaust the loan through farming only,” Sibandze explained.
The president said they were highly grateful to government who has engaged all parties concerned including FINCORP to salvage the situation.

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