R1bn fund launched to help black farming
SOUTH Africa has set up a R1 billion fund to help black farmers gain access to capital and boost their role in commercial agriculture, the state-owned Industrial Development Corporation (IDC) and the government said yesterday.
The joint Agri-Industrial Fund was aimed at easing the funding constraints and entry barriers to commercial agriculture facing black farmers, the IDC and the Ministry of Agriculture, Land Reform and Rural Development said.
“The broader agricultural sector is central to the recovery of the local economy, but, most importantly, this fund’s objectives are consistent with the IDC’s role in increasing the number of black commercial farmers,” said the IDC’s chief executive, Tshokolo Nchocho.
Agriculture, which contributes about 1 percent to gross domestic product, has been a bright spot in the country’s economy, which was already in recession before the Covid-19 crisis and deteriorated sharply last year after the government imposed a strict lockdown to curb the pandemic.
“Not only do we intend to work in commercial land areas where there is freehold title, but we intend to work, and aggressively so, in rural areas and communal areas where land is handled under different land tenure systems,” Nchocho said.
He said the IDC had a portfolio of just more than R4bn already invested in the sector, and the organisation intended to double its investment in the next three years.
Access to funding has become more challenging for new farmers after the Land Bank, the country’s largest agricultural-focused lender, missed debt repayments last year and had its credit rating cut, forcing it to seek financial assistance from the government.
The fund would assist black producers and investors in developing, expanding and acquiring farming operations, the IDC said. It would aim to establish high-value, export-orientated crops, competitive contract growers in the poultry, pork and beef sector and develop agro-processing.