The Agricultural Development Agency (Agda) was only launched three years ago – just before the onset of the Covid-19 pandemic – but despite that, the organisation is making strides in supporting an inclusive farming sector in South Africa.
Most up-and-coming farmers in South Africa operate outside the mainstream agricultural value chains and are often unable to gain access to markets without support. Being part of a value chain is one of the critical pillars of sustainable farming and without access to markets, farmers are almost certainly set up for failure.
Access to the agricultural value chain can hugely contribute to creating an enabling agricultural environment where a new farmer can become part of the mainstream agricultural sector. It also helps to create an opportunity to fund the commercialisation of an up-and-coming farmer sustainably. In addition, access to markets reduces the risk for all parties involved – investors included.
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Empowering developing black farmers
In the past, several promising projects around the country have been unable to secure adequate funding for their operations due to a lack of land tenure or ownership. Access to capital and off-take markets are key factors for new farmers to be successful.
Agda was brought into existence to empower developing black farmers. This followed the renewed focus on transformation in the agriculture industry and the Agri BEE Sector Code of 2017, which gave new transformation targets to the agricultural industry. Agda was officially launched at the Africa Agri Tech Conference and Expo (AAT) in 2020 in Pretoria.
Agda is part of the Public Private Growth Initiative (PPGI), which was established in 2018 under the leadership of the late Dr Johan van Zyl, then CEO and president of Toyota in Europe. The aim is to align strategic planning between the government and the private sector, in the interest of improving economic growth and how government and business work together.
Agda is governed by a board of directors constituted of an equal number of representatives from the government and the private sector, working together to achieve the common goal of sustainable and accelerated land reform to the benefit of South Africa and all its people.
‘Agda is the ideal vehicle’
“To drive and execute the Agricultural Master Plan, we need to integrate, aggregate, facilitate, and implement. Agda is the ideal vehicle to use to achieve these goals. We are the soldiers to execute the plans,” said Dr Mathews Phosa, chairperson of Agda at a roundtable discussion on the implementation of the Agricultural and Agro-processing Master Plan held in Pretoria recently.
He said that agriculture has a major role to play to grow the economy and added that the sector has the ability to contribute to youth employment across the value chain.
“The new technologies available on all levels in the sector offer a platform for young people to become involved. There are various opportunities for hard-working young people.”
Dr Mathews Phosa, chairperson of Agda
Phosa added that inclusiveness across the food value chain is necessary to obtain household food security. “Developing a sustainable and inclusive agricultural sector in South Africa will contribute massively to household food security, job creation, rural development, meaningful land reform, and emerging farmer empowerment. Landmark events are also needed to boost the agricultural sector’s transformation efforts.”
Capacity building and market access
In an attempt to address barriers towards commercialisation for black farmers, Agda has established an Integrated Farmer Development Programme (IFDP) which provides participating emerging smallholder farmers with services such as whole farm assessments, development plans, skills transfer, partnership, accounting services, and project management services.
Being part of the programme open the doors that can enable emerging farmers to implement the key success factors required for being a successful farmer and to become part of the value chain. The focus is on capacity building, skills transfer, market readiness, and market access.
Agda also facilitate skills transfer from commercial farmers and private sector agri-businesses to identified beneficiaries. This is achieved by supporting existing initiatives and by funding targeted projects.
In his address to the attendees at the roundtable discussions recently, Roelf Meyer, one of the main drivers and board members of Agda, drew attention to the main objectives of the agency, which are to promote and support access to agricultural land by black and up-and-coming farmers, and to support the use of agricultural land and infrastructure development to promote land reform and food security in the country.
Meyer said that Agda has the specific purpose to ensure the provision of appropriate training, as well as support and assistance to new farmers to improve capacity and access to agricultural markets in particular.
Agda wishes to achieve the following:
- Direct job creation at the farm level;
- Indirect job creation throughout the value chain due to increased activities;
- Food security;
- Training and skills transfer for all employees;
- Business management training for emerging farmers;
- Wealth creation for emerging farmers;
- Transformation in the agricultural sector.
Only through the pursuit of these objectives in partnership with the government will the sector and the country be able to include everyone who has ambitions to work in agriculture, Meyer said during the official launch of Agda in 2020.
Funding model
Regarding funding, the IFDP will be funded from Impact Capital Sources, providing mainly grant funding for the development of these farmers. After graduating from the IFDP, emerging smallholder farmers can get access to the Revolving Loan Fund (RLF) to upscale their businesses to a commercial level.
The RLF will raise capital from various sources and on-lend it to commercialising farmers in a defined value chain. Capital will be recycled to enhance the reach of the fund. The three sources of funding will be private equity, impact capital and commercial debt.
Agda will also coordinate cooperation agreements with various industry organisations to provide emerging farmers with enterprise development services such as feasibility studies, preparation of business plans, training and mentoring, technical services, accounting services, and project management services.
This funding and support model brings together all the key success factors required to reduce the funding risk to acceptable levels, creating the opportunity to spread the risk among different participants.
Agda believes that it can make a positive contribution towards growth, inclusiveness and social cohesion in the agricultural sector. It remains committed to driving partnerships and projects that can contribute to improved livelihoods, and address poverty, inequality, unemployment, and equal access to markets.
“We must integrate, aggregate, facilitate and most importantly, implement our plans,” Phosa stressed at the recent roundtable discussion.
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