AgriBank Shares Views on Grape Industry

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By Chrispin Inambao WINDHOEK IN a recent interview with Leonard Iipumbu, the Chief Executive Officer (CEO) at AgriBank, one of the principal financiers of the grape industry at Aussenkehr gave his views. He said he is proud that AgriBank is associated with projects at Exotic and Komsberg that are some of the major grape ventures. Through these major investments enormous job opportunities were created for thousands of Namibians. AgriBank provided funding amounting to approximately N$82.5 million which is about 6% of the total loan book, for the development of the table grapes at Aussenkehr, Exotic and Komsberg and created in the region of 3 500 permanent jobs and 7 000 seasonal jobs earning a total of N$ 6 million annually supporting approximately 17 000 extended family members. “Therefore, the grape industry has thus played a significant role in the diversification of the agricultural industry away from the primary production of maize and livestock, thus mitigating the risks of vulnerability to the national economy,” explained the former diplomat. AgriBank has the mandate as stipulated in the Agricultural Bank Act 5, 2003 to oversee and finance agriculture and related industries throughout Namibia as long as it is in the benefit of the nation and is proven to be financially viable. “Projects such as grapes are capital-intensive and the repayment period is therefore determined from the cash flow projections, ranging between three and fifteen years,” he said. However, the production loans are normally repaid within a year from the time of disbursement. The potential for the development of table grapes along the Orange River was identified by the Government of the Republic of Namibia considering that table grapes were already a big business just across the border and factors such as the climatic environment which was compared to other table-grape growing countries such as Argentina and France. Thereafter, the Government, in the case of Aussenkehr, developed the water infrastructure through bi-lateral agreements with China for irrigation purposes. “The grape projects are targeting the foreign markets where demand is high. The early harvest of grapes during the off-season in foreign countries creates the greatest potential for expansion and sustainability of the projects as they fetch premium prices. As long as the lucrative business of table grape growing remains attractive and sustainable, AgriBank will continue to play a vital role in value addition, wealth creation and increased contribution towards the national economy,” he stated. AgriBank has financed the table grape production as corporate projects. Should small-scale farmers show interest in table grape production, AgriBank may finance such projects depending on the premise of affordability and sustainability. “With regard to default, the grape industry is not an exception due to the high risk of the agriculture industry linked to numerous factors, fluctuations in the exchange rates and marketing conditions,” he responded, adding that as long as AgriBank is aware of the seasonal changes affecting production, there will always be room for reassessing the cause of default, to be discussed with the concerned project management to find an amicable solution.