Growing pains: it’s tough down on the farm
But projects like FarmSol can help new black farmers
● KwaZulu-Natal maize farmer Nonhanhla Mlotshwa, who quit the corporate world to follow her dream of a life on the land, says the private sector support she gets might see her realise her ambitions. But many of SA’s emerging farmers are struggling.
“I love farming, we were raised on it, our food came from the soil,” said Mlotshwa.
She has been farming outside Newcastle, KwaZulu-Natal, since leaving a corporate logistics job in 2013 and is in the process of buying land.
She is one of 684 farmers who are part of FarmSol, a black-owned agricultural services company that incubates start-up farms owned by emerging farmers.
FarmSol is supported and funded by the South African Breweries (SAB) Thrive Fund. The aim is that FarmSol will soon generate its own profit and SAB will stop funding it.
Mlotshwa, who was part of another development programme at SAB before FarmSol was established in 2017, said she would not survive without the support she has been getting. Her dream is to increase the number of people she employs beyond the seven seasonal workers she hires.
Aron Kole, managing director of FarmSol, said the incubator currently has a R190m loan book and SAB sources its maize, hops and barley from the farmers. Kole said FarmSol has a dual mandate — to be a profit-making business with a developmental agenda.
FarmSol helps farmers with support including access to capital, skills development and mechanisation. He said that apart from access to capital, SA’s farmers continue to struggle with access to water rights and land.
Those who have managed to build sustainable farms also wrestle with succession planning, with the average age of farmers being 60.
“Every business person needs to ensure that their business outlives them [and is] future-looking,” said Kole, explaining why FarmSol also supports farmers with succession planning.
The incubator provides emerging farmers with financial support such as interest-free loans, patient loan recovery and loan forgiveness. Although FarmSol may seem to be taking a lenient approach, Kole said the application process was rigorous and included a stringent system that measured farmers’ performance on specific metrics.
In the Vaal area, Amos Njoro farms yellow maize, soy beans and cattle on a 280ha farm. He sells his maize to SAB and also provides some of FarmSol’s clients with mechanisation services.
Njoro was formerly an agricultural technician and later an agronomist, working for a provincial government and Grain SA.
Mlotshwa and Njoro are some of the lucky few who are breaking into a sector with support that many of SA’s emerging farmers struggle to get.
Sbu Ngalwa, a former newspaper editor at Arena Holdings (which owns the Sunday Times) who has turned to vegetable farming, said access to capital had been a challenge. Ngalwa used various sources of capital to start his farm in the Eastern Cape, including
The Land Bank has become a swear word to black people Sbu Ngalwa
Farmer
his savings and a bond from the Land Bank. However, he said, other emerging farmers around him have struggled to get the capital they need.
“The Land Bank has become a swear word to black people.”
He said the bank operated like a commercial bank, favouring established farmers but failing emerging farmers who turned to the development finance institution for assistance, with most never receiving it.
Ngalwa said he had struggled to get an off-take agreement with the Land Bank because of his fluctuating income, with the bank threatening to repossess his farm.
Although incubator programmes were helpful, a large number of emerging farmers were left out in the cold.
“Black farmers are the ones no-one hears, they are voiceless,” he said.
However, Land Bank spokesperson Promise Ribane said the bank evaluated all applications based on merit in accordance with credit and investment policies and the National Credit Act.
“We appreciate the challenges faced by emerging farmers,” said Ribane.
She added that despite these: “The bank has programmes tailored towards assisting farmers which have, in recent years, seen an increase in the loans to emerging farmers. In the financial year 2018/19 the Bank advanced R5.7bn to historically disadvantaged persons and entities.”
Naudé Malan, a senior lecturer in development studies at the University of Johannesburg, said private-sector farmer assistance like FarmSol only worked when the company spearheading it was committed to ensuring that the farmers survived beyond the programme.
“We have to professionalise the small farmer sector, we have to upgrade it. Some [programmes] work, some don’t, some are quite bad because they often lock in the farmer to a single buyer.”
Malan said that small-scale farmers could only compete against big commercial farmers by focusing on intensive natural and organic farming, yielding produce for which farmers could usually get higher prices.