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May 09, 2010

South Africa: Bank begins project to help emerging farmers

by Sue Blaine

South Africa's Standard Bank on April 28 launched a R500m fund and a Stellenbosch University-based mentorship programme to help establish emerging black farmers in commercial agriculture.

The greatest impediment to starting out in commercial farming was the lack of advice, said Johannes Moller, president of SA’s largest farmers’ union, Agri SA.

Although statistics on what are called “development farmers” were not available, Moller estimated that SA had about 36 000 commercial farmers, mostly white, and about 120 000 “emerging farmers.”

Standard Bank, which estimated there were about 50 000 “developing farmers” in SA, realised many of them needed good advice on how to develop their farms into commercial operations, said the bank’s agricultural banking director, Willie du Plessis, a member of the council of the Agricultural Business Chamber.

The bank had decided to match its financial know-how with the agricultural expertise available at the University of Stellenbosch.

The fund was launched at the same time as the ribbon was cut at the new R4,4m Standard Bank Centre for Agribusiness Leadership and Mentorship Development. The centre aimed to contribute to land reform by mentoring those starting out in the industry, whether in commercial farming or in “agribusiness”, Du Plessis said.

Agribusiness is a generic term for the various businesses involved in food production, including farming and contract farming, seed supply, agricultural chemicals, farm machinery, wholesale and distribution, processing, marketing and retail, according to Wikipedia.

“We want to be a leading emerging markets bank, but the challenge is to make money and at the same time develop the market so there is a market we can tap into,” said Arno van Haght, the bank’s senior marketing and communications manager.

Said Du Plessis: “There was clearly a gap in the market and that got us talking. We identified an absence of key success factors that are restricting land reform…. We looked at what went wrong, and at recapitalising the failed (land restitution) farms and ensuring they are made productive (by linking farmers with mentors).”

The project’s focus would be on selecting from the pool of people already trying to make a living out of farming, farmers with a two-to-three-year track record who “have the urge to become commercial farmers”, he said.

The project’s two prongs are funded from Standard Bank’s corporate social investment (CSI) budget and it has its history in work the bank has done with a number of socially minded commercial farmers who have been working with “development farmers”, a group the bank defines as farmers producing any surplus for sale, said the bank’s CSI director, Nomsa Masuku.

“We said, we could do better if only we had a better link between the academics, the farmers and the rest of the chain … (It’s about) getting the right person on the right piece of land and ensuring that they can supply to the local and international market,” she said.

Business Day

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