The announcement by Finance Minister, Tito Mboweni that the Land Bank will provide R3 billion to support smallholders looking to increase their land holdings and agricultural outputs is to be welcomed, says Standard Bank.
The R3 billion, which will also be used to leverage partnerships with other financial institutions will provide opportunities for smallholders to benefit from becoming integrated into the formal agricultural value chain, and create opportunities for banks active in the sector, says Nico Groenewald, Head of Agribusiness at Standard Bank.
“The R3 billion will enable the Land Bank to work with partner banks from the private sector to provide guarantee and other schemes that will maximise the benefits that could accrue to smallholders. Standard Bank, which has supported the retail agricultural sector for decades, and has participated in similar partnerships, welcomes this announcement which could change the lives of many emerging farmers,” says Groenewald.
Commenting on other aspects of the budget speech, Groenewald said that although Minister Mboweni had acknowledged that climate change was having a more significant impact on farming operations than anticipated, no additional, or permanent structural support, for financially hard-pressed farmers had been announced.
“South Africa is a ‘water-stressed country’, and prolonged droughts are becoming more common. The announcement of financial mechanisms designed to assist farmers during these times would have been gratifying,” says Groenewald.