The AA loan scheme enables rich black farmers in communal areas to acquire commercial farms through the Agricultural Bank of Namibia (AgriBank).

But aspiring commercial farmers from previously disadvantaged groups were shocked when AgriBank informed all new applicants earlier this month that Government would no longer pay the 35 per cent subsidy, hence farmers would now be expected to fork out a minimum amount to qualify for the scheme.

This amount normally runs into hundreds of thousands of dollars, given the high prices of farms in Namibia.

"Communal farmers have no capacity to make a personal contribution beyond N$400 000," said DTA Secretary General McHenry Venaani.

The suspension of the guarantee was tantamount to a "reverse gear" in the land reform process, he claimed.

Opposition lawmakers charged that the move was contrary to last year's recommendations of the National Assembly Standing Committee on Economics and Natural Resources, which proposed wide-ranging measures to make the scheme's terms easier for aspiring farmers.

The parliamentary committee recommended that the grace period on the repayment of the AA loans be extended from the current three years, and that beneficiaries be exempted from paying land tax for a period of 15 years.

According to Venaani, this was aimed at making the scheme more affordable to previously disadvantaged people and to speed up the land reform process.

"We often accuse commercial farmers of hampering the land reform process by inflating farm prices, but in this particular incident it's Government that is guilty of that offence."

He blamed the suspension of the guarantees on Government's current poor financial position and called for an amount of N$500 million to be released by AgriBank to rescue the AA loan scheme.

"The N$500 million is taxpayers' money that is just idling in the reserves of AgriBank, we propose that this money should be utilised by the Ministry of Agriculture to continue the guarantees," Venaani argued.

The DTA MP said his party would seek further clarification on the matter from Government, and has already called for a meeting with Prime Minister Theo-Ben Gurirab.

"We need clarity as to how these new proposals came about, because we believe that the AA loan scheme was a product of consultation between all stakeholders, hence any amendment to it should come through parliament."

Since its establishment in 1992, the AA loan scheme has been dogged by controversy, which led to it being suspended briefly from the last quarter of 2003 until first quarter of last year because of millions of dollars Government had owed in respect of interests.

Members of the public and some parliamentarians have criticised the loan scheme for failing to serve the purpose it was established for, while other critics charged that it was only benefiting the political elite and their immediate families.

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