Idasa commends move to support emerging farmers

Tuesday, August 23, 2011
By: 
Nthambeleni Gabara

Pretoria - Idasa's Public Expenditure and Smallholder Agriculture Project has welcomed the Land Bank's commitment to spend R1 billion on emerging farmers in the next two years.

Institute for Democracy in South Africa project manager, Leslie Nyagah, said this move by Land Bank will unlock the long-term potential growth of agriculture as one of the pillars of South Africa's economic development.

He welcomed the Land Bank's allocation of resources towards emerging farmers, saying it was consistent with the South African government's intention of mainstreaming agriculture sectoral growth in the New Growth Path.

"In particular, it would promote rural employment, support for agricultural producers particularly emerging farmers, build value chain development and encourage investment in agricultural capacity through skills training and growth in infrastructure," he said.

Finance Minister Pravin Gordhan made the announcement at the recent launch of the 2010/2011 annual report of the Land Bank.

Making his comments regarding the new banking division established by the Land Bank to assist emerging farmers, Gordhan said: "This initiative, coupled with the Land Bank gearing towards spending over R1 billion in the next two years on emerging farmers, are commendable steps.

"As government, we want to see an increased development impact from a growing and sustainable institution."

He further said the Land Bank is contributing significantly to the economy through developing a whole new generation of famers.

The minister said this was the only way the country can achieve transformation of agriculture in this country and create a cadre of successful farmers from all sections of our community and a flourishing agricultural sector.

Dr Ben Ngubane, Land Bank board chairman, said following the recapitalisation of the Land Bank by government, the bank's position has significantly improved.

He said the bank's finances are healthier and it is now well positioned to deliver on its mandate.

"We are glad to have been part of the successful turning around of this institution. As we move towards the Land Bank's centenary, armed with revised business and target operating models, we are more confident that we will achieve even more.

"The board expects that the operating model will improve the way the Land Bank does business and will allow it to take advantage of the resulting efficiencies and provide the necessary focus to those areas that need specific attention," he said.

The bank recently created a division aimed at emerging farmers and more funding will be aligned with this sub-sector in the next few years than any other period in the bank's history to resuscitate distressed farmers and establish viable new ones.

Last year, Cabinet approved two new proposals suggested by the Land Bank. The first was a proposal on how to help distressed farmers restore their financial and organisational sustainability.

The second was a value chain financing model which will see the Bank financing businesses involved in the production, manufacturing and marketing of food.

Agriculture contributes about 2.5% to the South African GDP, with agro-processing also contributing significantly.

The overall value of agriculture is at more than R130 billion. The sector currently employs in a formal capacity some 650 000 people.

Government aims to create 130 000 jobs in agriculture and establish 50 000 commercially oriented smallholder farmers by 2014.