Picture: DAILY DISPATCH
Picture: DAILY DISPATCH

Government is reviewing the role of the Land Bank to boost support for emerging black farmers, agriculture, land reform and rural development minister Thoko Didiza said on Tuesday.

The Land Bank has previously been criticised for not doing enough to support emerging farmers.

In 2018, the Land Bank said it intended tripling to R15bn its lending to emerging farmers within the next three to four years. This would translate to 30% of its total lending of R45bn. In recent years, the bank has increased its lending to emerging farmers and agricultural development enterprises to about R5bn from R2.5bn.

The bank said at the time its mandate needed to be understood. First, it is obliged to finance agricultural development while maintaining food security, economic growth and the transformation of the agricultural sector.

This included environmental sustainability and job creation, Litha Magingxa, the state-owned institution’s head of agricultural economics, said then. Second, the bank receives no funding from the state, though the state does guarantee its loans. That means it has to carry the risk associated with the unique challenges posed by SA’s emerging farming sector. ​

In his state of the nation address in June, President Cyril Ramaphosa said that over the medium-term budget period R3.9bn would be allocated to the Land Bank to support black commercial farmers.

Delivering her budget speech in parliament, Didiza also touched on the contentious issue of land reform, saying addressing the issue and productive use of land will require a meaningful conversation with landowners.

Didiza said commercialisation of black farmers remains an important objective in transforming the agriculture sector.

The government is also looking to increase the number of black commercial farmers to ensure ownership and control of the agricultural value chain by previously disadvantaged groups. In many instances, black farmers struggle to get access to markets, finance and technical support to link them with integrated value chains.

Didiza said financing of agriculture remains an important ingredient for farming, whether a new entrant or established producer. She said the Land Bank has a mandate to finance established farmers and developing farmers.

“This is an important mandate, however, we need to reflect seriously whether given the current mandate and the financial environment in which this institution has to operate is it properly capacitated to undertake this task. Secondly, we have various instruments that seek to support developing farmers which in large measure are grants for support in infrastructure,” the minister said.

“Currently, we are working with Statistics South Africa to develop a farmer register that will tell us how many producers we have, the scale and nature of operations. This data is important in order to ensure targeted support by government,” she said.

On land reform, Didiza said: “Many commentators have written on the successes and challenges of land reform in South Africa. In this very legislative assembly we too as public representatives of our people would like to find a lasting solution to the legacy of dispossession in our country.”

In December, the National Assembly and the National Council of Provinces adopted a contentious report that called for a constitutional amendment to make it explicit that expropriation without compensation could be used to address skewed land-ownership patterns dating back to the colonial and apartheid eras.

The land debate has divided the country and agitated investors, with the proposed amendment set to be challenged in court by various stakeholders and political parties.

“Addressing the land question and its productive use will need a meaningful conversation with landowners, be they farmers, companies or trust,” said Didiza.

Thoko Didiza. Picture: ROBERT BOTHA
Thoko Didiza. Picture: ROBERT BOTHA

“We need to be genuine and deliberate in transforming this sector. Historically, black South Africans were excluded from meaningful participation in the agricultural economy. The food value chain remains highly concentrated among a few players. This is hardly the basis of building a sustained agriculture economy that serves all.”

DA MP and agriculture, land reform & rural development spokesperson Annette Steyn said property rights must be protected for the economy to thrive.

“We are all aware that we are sitting on a time bomb and that ‘the land issue’ must be resolved. The Democratic Alliance supports land reform, but the devil is in the detail,” said Steyn.

“Are we going to follow the path of countries like Zimbabwe and Venezuela, and cause an economic meltdown? Or are we going to surprise the world and heal our divided nation with a land-reform programme that acknowledges the injustices of the past while we build a future for all South Africans?”

phakathib@businesslive.co.za