ETHIOPIA: UN says making poor farmers repay loans "immoral", It said many farmers in Sidama Zone in southern Ethiopia were already relying heavily on humanitarian help from charities and could not repay their loans.

The United Nations said on Thursday that forcing farmers facing serious food shortages to pay back money borrowed to improve their land was "immoral". The UN’s Emergency Unit For Ethiopia (EUE) said the government should ease the credit burden on already overstretched farmers facing severe food shortages.

It said many farmers in Sidama Zone in southern Ethiopia were already relying heavily on humanitarian help from charities and could not repay their loans. In some parts of the country, farmers who have been unable to meet the repayments on money borrowed for improved seeds and fertilisers have been jailed. Interest on loans taken out by farmers can be as high as 12.5 percent – higher than bank rates – for "agricultural extension packages" of improved seeds and fertiliser. The EUE report said: "It is just immoral and impossible to expect full repayment for the supplied agricultural extension packages from farm households that are already experiencing a food shortage. 

If part of their debts cannot be written off, they will experience even bigger problems, and it will become very difficult for them to overcome this unfortunate livelihood situation without government support und humanitarian assistance." The report, entitled "Uncertain food security situation for farmers in Sidama Zone due to lack of access to farm inputs", said the government should subsidise seeds and fertiliser, and offer better credit terms. "The current extension package being disseminated and implemented throughout Ethiopia should be a supplement to indigenous cereal production rather than total substitution that threatens food security and subsistence agriculture." Sidama Zone, about 275 km south of the Ethiopian capital, Addis Ababa, is one of the zones in the Southern Nations, Nationalities and Peoples' Regional State. It is one of the densely populated areas in Ethiopia, with about 2.5 million inhabitants in 721,00 ha of land. The farmers in the area mainly grow enset (a type of banana), coffee, maize, wheat, tef (Eragrostis abyssinica - a type of grain), barley, haricot bean and qat (Catha edulis – a shrub whose leaves have mildly narcotic properties). 

The area was particularly hard hit during the 1999 drought, and the situation has been exacerbated by massive soil erosion and failure to tackle the drought problem. The report said that the drought had rendered many farmers unable to pay back their agricultural loans. Moreover, many of them had resorted to cheap second-generation hybrid seeds, leading to reductions in yields by as much as 30 percent. "Generally, the poor productivity of crops in the last two years in Sidama Zone can be attributed on one hand to the application of no or inadequate fertiliser quantities and [on the other hand] to the use of inappropriate, poor and degenerated seeds of maize," the report said. Although the price of maize has risen - to 65 Ethiopian birr per 100 kg - but this is not yet high enough for farmers to break even. 

They estimate 100 kg should sell for 70 Ethiopian birr (US$8.20) to break even. As a result, they say, about 90,215 people and 15,000 children desperately need food aid. The report also said many under-five children were affected by acute and chronic malnutrition, resulting in kwashiorkor and marasmus. The outlook remains bleak, according to the report. "This year, the use of improved seeds and fertilisers has significantly dropped in Sidama Zone. The drop in usage is startling, with some 2,740,000 kg of fertiliser being used in 2000 dropping to 311,900 kg in 2002. The seed usage has also dropped dramatically, from 519,000 kg in 2000 to 13,600 in 2002," the report stated.

http://www.irinnews.org/printreport.aspx?reportid=32482