Expert urges farmers to leverage ‘good debt’ for growth

As South Africa’s agricultural sector enters 2026, the landscape is defined by both opportunity and caution. According to Nedbank’s head of sales for agriculture, Daneel Rossouw, the current macroeconomic environment presents a unique moment for farmers and agribusinesses to position themselves strategically for growth.

“Interest rates have declined over the past few years, and inflation is now around 3.5%,” Rossouw said. “While these figures suggest more room for interest rate cuts, we’ve seen very little increase in agricultural debt.”

He urged farmers to start thinking about good debt, the kind that funds growth and enables strategic investment rather than simply reacting to market pressures.

Rossouw said policy and financial conditions offer cautious optimism in 2026.

“After several years of elevated borrowing costs, 2025 marked the start of a meaningful monetary easing cycle. The South African Reserve Bank’s decision to lower the repo rate to 6.75% in November reflects easing inflationary pressures and a more balanced growth outlook.

“For agriculture, this signals a more supportive financing environment, but one that should still be approached with discipline. Farmers should use this window to consolidate balance sheets, invest in productivity and climate resilience, diversify markets and revenue streams, and strengthen financial buffers against climatic and geopolitical risks,” he advised.

Three themes from 2025 shaping agriculture in 2026

Looking back at 2025, Rossouw highlights three major themes that continue to shape the sector going into 2026:

Animal production and biosecurity: Animal production, spanning beef, poultry, pork, and other livestock, is by far the largest sector in South African agriculture. Biosecurity has become a critical issue for growth and export performance, with challenges such as foot-and-mouth disease underscoring the need for industrywide collaboration.
Global trade and tariffs: International market shifts, including changes to the African Growth and Opportunity Act (Agoa) and import tariffs, created both uncertainty and urgency for farmers and exporters. While certain crops saw some relief, high-value exports like citrus and table grapes faced pressures, highlighting the importance of market diversification and financial planning to absorb shocks.
Climate and weather extremes: Flooding, droughts, and unpredictable rainfall patterns have affected multiple provinces and crop types. These events highlight the need for climate-smart agriculture, investment in resilience, and long-term risk management.

Building business resilience and partnerships

Rossouw emphasised that these challenges highlight the importance of strategic financial management.

“Farming isn’t a short-term game. It’s a five- and 10-year plan business. Those who anticipate market shifts, invest prudently, and manage risk will be best positioned to grow sustainably.’

“Working together across organised agriculture, agribusinesses, and government is critical, especially for biosecurity and market access. Collective planning, aligned with sound financial strategies, enables the sector to respond with agility and confidence.”

He urged farmers to cultivate a strong, proactive relationship with a financial partner, which is critical for navigating challenging periods.

“We encourage our clients to see us as a trusted partner and to openly discuss any difficulties they may be facing. This enables us to provide tailored support, such as bespoke, cash-flow-friendly financing and loan restructuring for short-term funding, just as we are doing for clients affected by the recent floods in Limpopo.”

Other strategies for successfully navigating 2026 include the following:

Long-term planning with flexibility: Developing five- to 10-year plans while maintaining the ability to respond quickly to market changes or policy shifts is essential for sustainable growth.
Investing in growth with good debt: Strategic borrowing to fund expansion or modernisation can pay dividends, particularly in high-value sectors such as export-oriented fruit production.
Climate-smart and technology-driven farming: Data, scouting apps, and modern agritech reduce risk and improve efficiency, enhancing profitability even in unpredictable conditions.

For farmers, the takeaway is clear: 2026 offers opportunities for those who plan strategically, invest wisely, and leverage available financial tools. With careful debt management, attention to market signals, and a long-term vision, South African agriculture can weather the current challenges and emerge stronger and more competitive.