With Land Bank having disbursed R980 million (between April 2023- April 2024) in grants and loans recently to farming operations, chief executive officer Themba Rikhotso said the development bank was well on its path to lending a hand to farmers across the country.
During Food For Mzansi and Land Bank’s lunchtime conversations at the 2024 Nampo Harvest Day in Bothaville in the Free State, Rikhotso said the bank has been hard at work executing the strategy set up by the board.
“After the default that the bank has experienced [in April 2020], the board had come up with the strategy, which in the main was the turnaround strategy of the bank. The board resolved that to have an effective strategy, we had to ensure that we had an overhaul of the bank’s operations, policies, and processes,” he said.
Rikhotso outlined the five key strategies that the board has set for the bank to reposition itself with the needs of the agricultural sector in the country.
“The first strategy was the revision of the funding model of the bank. The second one was the commercial model of the bank. The third one was the delivery model. The fourth was the credit risk model, and the last one was the revision of the operating model,” he said.
FARMER POLL
📢 Which bank is powering your farming journey?
Tell us which bank you use so we can better advocate for the specialised financial tools and accessible capital needed to help South African farmers overcome growth barriers and thrive!
All submissions are kept strictly confidential.
Related stories
- Happy hails blended finance for Land Bank farm growth success
- Land Bank unveils personalised crop insurance cover
Rikhotso said in the next few months the bank will start operating out of default, which has been made possible by the many strides the bank has achieved.
Dewald Olivier, chief executive officer of Red Meat Industry Services (RMIS), said they were impressed by Land Bank’s working model and seeing money being disbursed.
“What we have seen and through our discussions is that the blended finance is starting to roll, the monies are starting to go out. From an RMIS perspective, what we want to see is improvement and collaborations among all the livestock.”
Collaboration for agricultural revival
The Free State department of agriculture and rural development’s head of the department, Dr Takisi Masiteng, said it was critically important that all the entities work together to ensure they deliver on their mandate.
“We need to ensure that we stop working in silos and work together. When it comes to blended finance, there are improvements that we have seen, and as the model involves all stakeholders, it cannot be that we are not moving in one direction. Public-private partnership is important for us to see a revived agriculture in the country,” he said.
Chief agricultural economics officer at Land Bank, Sakhumzi May, said the sector, in its nature, is exposed to a lot of risks, and the entity needs to mitigate those risks for the benefit of both the farmer and the institution.
“The risks that we are exposed to as a sector pose a whole lot of challenges, especially in the economic climate that we operate in. However, I must say the sector is very resilient. If you look at the population that is out there and how agriculture has managed to ensure we are food secure amid the biosecurity challenges, a lot has been done,” he said.
Navigating challenges and providing tailored support
May said in their pursuit to ensure that both parties work smoothly, they do data assessment to farmers to ensure that support given to farmers in all sub-sectors is the right one.
“Going forward, prospects are there for the sector, and as a bank, we are well positioned to support the farmers and the sector to ensure that agriculture creates jobs,” he said.
Meanwhile, Rikhotso said the geopolitical challenges do put pressure on the bank, “These challenges affect our trials on a regular basis, and we constantly need to think how we mitigate the risks in the sector and how we work with our farmers to help them as they experience these challenges.
“In the last 12 months, we came with a lot of assistance packages which were well over R700 million to assist farmers that were affected by those many challenges in the country because whenever they experience those challenges we have to figure how we assist them,” he said.
ALSO READ: Happy hails blended finance for Land Bank farm growth success
Sign up for Mzansi Today: Your daily take on the news and happenings from the agriculture value chain.
