Financing opportunities and challenges accessing it by black farmers heated the icy temperatures at the Mzansi Young Farmers Indaba held at FNB Stadium in Nasrec, Johannesburg, this week.
The two-day conference, which took place on the eve of Youth Day, brought together about 500 young farmers, private and public funding institutions, government and non-governmental institutions working in the agriculture and health sectors.
The agri finance institutions were represented by the Land Bank, Industrial Development Cooperation of South Africa (IDC), Kagiso Trust, the Jobs Fund and PepsiCo’s Kgodiso Development Fund.
IDC head of agro-processing and agriculture Kgampi Bapela announced his organisation had made grants worth R400-million available to farmers.
Bapela urged young farmers to take advantage of the funding and said the IDC aimed to reach as many farmers as possible.
Land Bank chief executive Themba Rikhotso said the bank had simplified its application forms for its blended funding scheme, which is part grant and part loan, to make the process easier for farmers.
“A lot of commercial agripreneurs owe their success to the Land Bank,” he said
Kgodiso’s executive director Dialo Tilo said PepsiCo wanted farmers to participate in its value chain, saying about 90% of tomato paste was imported. He said South Africa needed to make a concerted effort in import substitution.
Kagiso Trust CEO Mankodi Moitse said the agricultural sector was least transformed and complex to enter, which is why her organisation is building capacity in the agricultural sector.
“When banks see a farmer as a high risk, we want to de-risk the farmer so that they are able to start operating,” she said.
It was the mixture of applause and murmuring on the floor as the panel discussion proceeded that heralded what was to become interesting engagements when comments and questions were taken from farmers.
Alfred van Wyk, a 38-year-old cattle and sheep farmer from Ventersdorp in North West, said he had been farming commercially since 2012 but had not succeeded in getting funding from the IDC despite numerous applications. He said the IDC required double the list of documents required by commercial banks. “Farmers don’t have three to five years of audited financials, even commercial banks accept 12 months financial statements.”
His sentiments were shared by other farmers.
The message from the funding institutions was that there was no way funding could be obtained without complying with the requirements of the Companies and Intellectual Property Commission (CIPC), the South African Receive of Revenue and relevant legislations and other regulatory requirements.
Tilo said the notion that development finance meant less requirements than those required by commercial banks needed to be dispelled, adding that farmers needed to run their operations like businesses. He said development financiers even offered support to farmers to meet the criteria.
“Compliance such as registration with CIPC, the receiver of revenue are a requisite and the back office work must be properly done,” he said. “The second aspect is information. It is mandatory for funding institutions to ask for certain information from farmers such a balance sheet and track record. I would advise any farmer to invest in an accountant,” he said.
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