If you’re a weekend farmer or a government worker, forget about applying for the Land Bank’s brand-new R3.2-billion blended finance scheme. Preference will be given to black-owned farming enterprises in high-value commodities.
These commodities, says the Land Bank, are prioritised in the agriculture and agro-processing master plan. The fund is aimed at black farmers and signals a new era for the controversial bank who has just resumed its lending activities.
Yesterday, during a briefing about its latest financial results, Land Bank chairperson Thabi Nkosi confirmed that the fund would support the development, acquisitions and production expansion of qualifying black producers in prioritised value chains.
The programme will be implemented over a ten-year period with the department of agriculture, land reform and rural development investing a minimum of R3.2 billion. The department and the Land Bank have each invested R325 million per annum which will result in the creation of a R650-million annual fund set to grow to R1.95 billion by the end of the third year.
The funding will consist of both a loan and a grant.
Elder Mtshiza, the chief director for the Comprehensive Agricultural Support Programme (CASP), said the grant portion shall be treated as an equity contribution on behalf of black producers. No financial returns are expected.
“The scheme aims to support the enhancement of production and agro processing by black producers through deliberate, targeted, and well-defined interventions. Accelerating land redistribution and make land reforms successful. Also grow the economy, create sustainable employment eradicate poverty and transform the sector,” Mtshiza said.
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Are you eligible for funding?
To be eligible, applicants must meet the following criteria:
- They must be South African citizens with a valid identity document.
- Priority will be given to black-owned and -managed farming enterprises that are commercially viable in commodities listed in the agriculture and agro-processing master plan.
- In the case of joint ventures, the non-black partner should have a maximum of 40% but not less than 26% ownership in the enterprise.
- Enterprises with at least 10% farmworker profit sharing. The national development plan has prioritised this by 2030.
- Youth (40% targeted), women (50% targeted), people with disabilities (6% targeted) and military veterans.
- Qualifying applicants of 60 years and above who demonstrate evidence of a successor.
Who does not qualify
- Politicians in public office (subject to a 12-month cooling period).
- Employees of government and state-owned entities (subject to a 24-month cooling period).
- Fund administrators.
- Special advisors for agricultural programmes.
- Foreign nationals, those with dual citizenship and illegal immigrants.
- Part-time producers.
- Politically exposed persons posing a reputational risk as identified through the credit provider’s lending policies, including but not limited to anti-money laundering risk management and compliance policies.
- Distressed producers where the grant is required to settle their debt.
- Joint ventures with farmworkers where the workers are not involved in the management of the operation.
- Applicants with no provision for farmworker profit sharing.
Farmers who want to apply will only be able to access the blended finance scheme through the Land Bank. However, the department will perform and oversight role, including reporting to all its relevant structures.
According to Mtshiza the targeted commodities include fruits, nuts, and vegetable value chains; grains and sugarcane; the poultry value chain; pork, beef, and sheep value chains; hemp and cannabis; viticulture; wool and mohair; and other viable ventures that support the agriculture and agro-processing master plan.
Mtshiza also urged farmers who do not qualify to allow both the Land Bank and the department to help them in reaching the qualifying criteria and to not lose hope. This is because the scheme is aimed at reaching as many farmers as possible.
Grants will be provided based on the pre-set government qualifying criteria. An important note is that long-term lease agreements, including permission to occupy, that is longer than the period of funding will be accepted as adequate security to enable access to funding.
For more information, make contact with your provincial Land Bank office.
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