Sessional Paper No. 08 of 1979 on Gurantee by Government to Barclays Bank Kenya Limited for a Loan to Kenya Farmers Association (Co-operative) Limited Under the Guarantee Loans Act (CAP 461)

Abstract

The Guaranteed Minimum Returns System that was introduced by Government in 1942 as a Short-term Agricultural Credit for large scale wheat and maize growers has, over the years, en­countered serious repayment problems. Non-payment of GMR by loanees has therefore featured in every annual financial Reports of the Controller and Auditor General and the Public Accounts Committees. The arrears of advances made under the Guaranteed Minimum Returns Scheme amounted to K£9,860,709 (KShs.197,214,180) as at 30th June 1978. This sum does not include the Cereals and Sugar Finance Corporation Shortfalls under the same Scheme that amounted to K£249,534 (KShs.4,990,680/=) at the same date. The Government has viewed the deteriorating situation of GMR System over the past years with serious concern and has therefore now decided in accordance with recommendations of the Public Accounts Committee and the views expressed by Honourable Members of the National Assembly that GMR should be abolished and be replaced with a better form of a Short-term Agricultural System that will service the Agricultural Sector more efficiently than the GMR Scheme.