Stop blaming up-and-coming black farmers for the Land Bank’s woes, says Professor Johann Kirsten, a leading agricultural economist and non-executive director of the government-owned development bank.
In a no-holds-barred analysis, originally published by Rapport newspaper, Kirsten criticised those who claimed that the bank’s financial troubles were based on the financing of emerging farmers. “This is a myth,” he says. “The reality is that 74% of the Land Bank’s total loan book is to white commercial farmers. It goes without saying that the largest part of the R12 billion in arrears (as calculated in June this year) does not therefore lie with emerging farmers.”
Instead, Kirsten says, the agriculture sector should be asking what happened to the profits made by specifically grain industries where particularly good harvests have been made in the last few years. However, he acknowledges that a portion of the bad debt can understandably be attributed to the long-standing drought in the west of South Africa.
Kirsten’s analysis follows a recent Food For Mzansi article in which Thabi Nkosi, the new non-executive chairperson of the Land Bank, says the bank is on a path of recovery after being in “intensive care” for years.
“Focusing on the developmental cohort is what is going to take us to the next level,” Nkosi says. “When you speak of developing farmers, one thing that they will always lament is a lack of finance. It is one of the big issues that emerging and developing farmers talk about year in and year out.”
ALSO READ: Thabi Nkosi: Land Bank shifts focus to developing farmers
Accusations of bullying
Meanwhile, Kirsten acknowledges the work being done by Land Bank’s new board of directors – now under the leadership of Nkosi. He says they are actively trying to fix the bank. First, they must reach a solution to the liquidity crisis with the bank’s capital providers before it can fulfill its rightful development role in the agricultural sector.
Kirsten says this is necessary “so that black farmers can also be part of the growing agricultural sector. Until then, it is important that all role players in the sector enter the debate with responsibility and in consideration of all facts.”
Earlier this month, the Southern African Agri Initiative (Saai) accused the Land Bank of using bullying tactics against farmers behind with repaying their debt. Saai chairperson Dr Theo de Jager told EWN, “Very often they are third- or even fourth-generation farmers on that land. They have owed much more to the Land Bank in relation to their assets before, but all of a sudden over the last few months they are being liquidated left, right and centre and once that process is done they are being left with nothing. We could not find one of the farmers who could walk out there with anything to start over again.”
However, Kirsten, who has 35 years’ experience as an agricultural economist, says the liquidity crisis now forces the Land Bank to act responsibly and make sure that all debts are settled on time so that the bank can fulfil its obligations.
“It is therefore important that bad debts are tackled and farmers who are in financial distress must contact their bank early on. When I look at the reports in the media, it seems that many farmers were just hoping that the Land Bank would disappear and that they would get away with no payment. It’s a shame if it’s true.”
ALSO READ: Thabi Nkosi: Land Bank shifts focus to developing farmers
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