Agriculture Credit Guaranteed Scheme (ACGS) cover is meant to assist dry-land farmers in reducing their debt obligations in case of crop failure due to drought, floods, frost and hailstorm.
For farmers to be covered drought, floods, frost and hailstorm should have been declared by His Excellency the President of the Republic of Botswana.
The ACGS was first established in 1986. The scheme has since been amended over the years to align it with developments in the agricultural sub-sector. This scheme is owned by the Government of Botswana through the Ministry of Finance and Development Planning (MFDP).
Specific items and activities covered by the scheme
The scheme covers three main items/operations:
Seasonal Inputs: Fertilizers, seeds, crop production fuel, insecticides, pesticides, and other agro-chemicals used to protect crops, workers’ wages and salaries, packaging material, crop transport costs and similar working capital required to produce the crop.
Farm/Field development: de-stumping, land clearing, labour for arable dry-land operations, contract ploughing and planting, fencing of arable fields/farms, draining expenses, land ripping and related operations.
Farm Machinery and Equipment: Tractors, planters, cultivators, harrows, ploughs, crop spraying equipment, and borehole equipment specifically drilled for domestic consumption at the farm (not for irrigation, dairy or poultry production, but for dry-land crop production only).
Pecuniary value of the claim covered
The scheme shall cover 0% to 85% of the instalment falling due in that cropping year. The cover will depend on the severity of an event (drought/floods/hailstorm) and whether drought and/or floods have been declared.
National Development Bank as one of the participating bank pays a premium of 5% of the loan instalment for the cropping year to the Government of Botswana and the participating farmer also pays 5% of the same instalment for the year.
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