Johannesburg – Agriculture, Land Reform and Rural Development Minister Thoko Didiza, on Monday launched a R3.2 billion Blended Finance Scheme with the Land Bank to assist farmers.
The department said the programme will be implemented over 10 years with the department investing a minimum of R3.2 billion over the period.
“The funding will be on a blended finance structure which is a combination of a loan and grant with a focus on commodities as per the Agriculture and Agro-processing Master Plan,” said the department.
“The department and Land Bank have each invested R325 million per annum, which will effectively result in the creation of a R650 million fund a year and it will grow to R1.95 billion by the end of Year three.”
The Land Bank is a specialist agricultural Development Finance Institution (DFI) that is embarking on a revised strategy which is aimed at improving the effective balancing of financial sustainability and developmental outcomes to meaningfully contribute to the development and transformation of the agricultural sector in South Africa.
The Bank achieved a clean audit outcome for the Financial Year 2022 indicating the Banks sound governance, management controls, and processes to enable the successful implementation of the Blended Finance Scheme, said the department.
Commenting on the development, Minister Didiza said: Strategic partnerships like these are critical to ensure growth, food security, development of farmers and transformation of the agricultural sector, and contribute towards job creation.
Her department said the partnership aims to support the development of small and medium-scale producers to participate in the mainstream agricultural economy and along the agricultural value chain.
“The objective of the fund is to make the land and agrarian reform successful by supporting the development, acquisitions and production expansion of qualifying black producers in prioritized value chains,” the department said.
This is meant to achieve the following goals:
economic growth and expansion of the agricultural sector,
accelerate land redistribution and wealth creation,
The job creation,
transformation of the sector,
increased exports,
effective land reform and rural development (especially underutilised land),
“Access to the Blended Finance Scheme will be directly through Land Bank and the department will perform an oversight role including reporting to all its relevant structures,” the department said.
“Furthermore, the received Expression of Interest from other private Banks and engagements are at an advanced stage as part of the goal of broadening access to finance by producers.”
The targeted sectors include:
Fruits, nuts and vegetables value chains
Grains and sugarcane
Poultry value chain,
Pork, Beef and sheep value chains,
Other viable ventures that support the AAMP.
The department said it was important to note that long-term lease agreements, including Permission to Occupy that is longer than the period of funding, will be accepted as adequate security to enable access to funding.
WHO QUALIFIES?
South African citizens with a valid identity document;
Black owned and managed farming enterprises that are commercially viable in commodities prioritised in the AAMP.
In the case of Joint Ventures, the non-black partner should have 40% but not less than 26% ownership in the enterprise;
Enterprises with 10% Farm worker profit sharing; the National Development Plan urges that by 2030, no one should go to bed hungry!
Youth (40% targeted), women (50% targeted), people with disability (6% targeted), and military veterans.
