Agriculture can help spur Limpopo’s economy
It is a resilient and fast-growing sector in the province
Limpopo farmer Maano Khodani, 22, hopes to expand the agricultural enterprise that he runs on traditional authority trust land to enable him to compete with established commercial
farmers.
Khodani farms garlic, vegetables, pigs, and cattle in Divhani, a rural village in the Vhembe District of Limpopo. His enterprise, which he started when he was only 16, is self-funded. He does not belong to any farmers’ organisation and has very little knowledge about government funding opportunities that cater for people like him.
He is among scores of emerging farmers who, if they qualify, may find themselves growing from emerging to commercial farmers through the intervention of the Industrial Development Corporation (IDC), which is on a mission to help transform the agri-business and agro processing sectors.
The IDC recently launched the Agri-industrial Fund, aimed at addressing funding constraints facing black farmers and breaking entry barriers into commercial farming.
The R1-billion fund is a partnership between the IDC and the department of agriculture, land reform and rural development (DALRRD).
According to the IDC, one of its objectives is to develop and implement high-impact, black-owned, large-scale commercial agricultural projects.
The DALRRD says the fund’s main goal is to support the development and expansion of the agricultural sector by assisting qualifying black producers or investors in developing, expanding, acquiring, and integrating operations in prioritised agricultural value chains.
“We are moving away from emerging. We don’t want to fund people just to get by. We believe in increasing the size of the cake instead of just keeping on cutting it, because it’s not going to be sustainable in the long term,” says the IDC’S Head of Agro-processing and Agriculture, Kgampi Bapela.
Bapela says the key mission of the fund is “to create a globally competitive agro processing and agriculture sector, which is market driven, and is inclusive of rural economy and creating entrepreneurship. Its main purpose is to enhance the participation of black individuals in the agri sector all over South Africa and in all sub-sectors of agriculture.”
The IDC seeks to help establish high-value, export-oriented orchards on community-owned agricultural land (restituted or communal properties) across the country and establish competitive contract growers in protein value chains such as poultry, pork and beef, and other agro-processing ventures that support the Agriculture and Agro-processing Master Plans.
Ebrahim Patel, Minister of Trade, Industry and Competition, noted in his foreword in the IDC’S 2020 integrated report that the department “has accelerated the development and implementation of sector master plans. We have already completed masterplans in the automotive, poultry, sugar and clothing and textile sectors, which now serve as a blueprint to harness energies among industry players for activities such as investment in sectors which together employ some 500 000 people. We are now working on sector masterplans in the steel and furniture sectors, which we expect to complete in the coming year”.
Bapela says Limpopo, which is set to host the Limpopo Investment Conference next week, has great opportunities for farmers due to its unique climatic conditions. He cites macadamia, blueberries, and table grapes among some of the commercial crops that are taking off in Limpopo, which is known traditionally for its high-quality citrus produce.
“It is also one of the provinces that has a lot of land that is being transferred back to communities and families. Unfortunately, some of the land is lying fallow or those [portions] that were productive have regressed. But we see that as an opportunity to grow the agriculture sector in the province,” Bapela says.
Limpopo is also in a unique position in that it’s 85% rural, with plenty of land available.
“Land is not produced. What we need to do is to forge relationships, increase food security, open markets, enhance competition and entrepreneurship. Limpopo is heavily rural, but at the same time this can also be turned into an opportunity,” says Bapela.
He says agriculture remains a key economic driver and its resilience was underlined by how it continued to grow during the Covid-19 lockdown when other sectors took a severe beating.
The Quarterly Labour Force Survey Q2 for 2021 released by the Statistics SA this week revealed that formal sector employment decreased by 375 000 during the quarter — but employment in agriculture increased by 69 000 (8.7%).
“The sector is expected to continue to grow,” says Bapela.
He adds that one of the advantages for the agribusiness is that unlike mining, the cost of creating jobs in the sector is much lower, hence it’s able to sustain jobs when others are forced to shed workers.
To this end the Limpopo provincial government has announced plans to grow the agriculture and agro-processing sector.
Premier Stanley Mathabatha has announced that in line with the Provincial Industrialisation Strategy, they will be prioritising the revitalisation of agriculture and agro-processing value chain as catalytic projects. Mathabatha announced that they intend to increase agricultural production linked to agro processing.
With the SME sector acknowledged as one of the main drivers of the country’s economy, Bapela says the IDC also has funding models to cater for this sector.
One of these is the Small Business Finance, which is rolled out through the organisation’s nine regional offices located in all the provinces. The SBF caters for businesses looking to access funding from R1-million to R15-million, in sectors funded by IDC.
Another IDC subsidiary is the Small Enterprise Finance Agency (SEFA) which offers SMES and co-operatives credit facilities from R500 up to R15-million.
Bapela says while the IDC and its agencies set out to assist, their work is not without challenges and he advises businesses applying for assistance to ensure that they comply. He cited applicants who send ill-prepared applications and who fail to understand that no one is entitled
to be funded by the IDC — they have to meet certain requirements.
“They get impatient, and somehow they become despondent. Somebody is in agriculture and they believe they should be funded,” says Bapela, advising that applicants seek assistance from the IDC and its agencies in order to understand its requirements.
Bapela says that the turnaround time for applications within the IDC is determined by the quality and readiness of the applicants and their submissions. He says the IDC has checks and balances in place to ensure that those businesses assisted with loans have the capacity to make timely repayments.
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