It aims to unlock opportunities in agricultural production and agro-processing as well as the acquisition of land by young black producers.
The department of agriculture, land reform & rural development did not disclose the total amount of the fund but said it would take the form of blended finance. This means the scheme will be partly financed by loans from the private sector and grants from the government.
Elder Mtshiza, the department’s programme manager for blended finance, said the government is ready to support smallholder farmers with up to R5m in funding if they have a bankable proposal, evidence of land ownership or leased land, and two years’ agricultural experience.
The R5m is made up of a 60% grant from the government and 40% from banks.
For medium-scale farmers the maximum is R10m and the funding is 50/50. For large-scale commercial farmers, it is R40m, made up of a 40% government grant and 60% in bank loans.
“We have set aside enough money” to provide support to the youth, women and people with disabilities in the sector, Mtshiza said. “The Banking Association SA agreed in writing to accept lease agreements as security of tenure to provide blended funding, which should be equal to or longer than the term of the loan.”
Mtshiza, who is also responsible for the department’s comprehensive agricultural support (Casp) and Ilima/Letsema programmes, was speaking during a webinar focused on highlighting opportunities for young people in the agricultural sector and its value chains.
Casp, which has an infrastructure grant budget of more than R1.1bn and an extension services budget of R310.3m, is aimed at expanding the provision of agricultural support services to subsistence, smallholder and black commercial farmers.
The Ilima/Letsema programme, which has a conditional grants budget of R597m, is focused on reducing poverty through increased food production initiatives, by supporting households with inputs such as seeds and implements.
Both the schemes are aimed at creating sustainable employment for youth, women, people with disabilities and military veterans, and to eradicate poverty. They are also meant to transform the sector, Mtshiza said.
The agriculture sector is considered one of the beacons of the economy as it continued operating during the lockdowns. It contributes 3% to GDP and is responsible for 900,000 jobs. The country has also become the bread basket of the Southern African Development Community (Sadc), exporting a sizeable amount of produce to the region and the rest of the continent.
In her opening remarks at the webinar, agriculture minister Thoko Didiza said Covid-19 reminds SA about the importance of food security at household, regional and national level.
“Our food systems are weak and need strengthening. The pandemic came at a time when we were facing climate change challenges in SA, with floods and droughts in some parts of the country,” the minister said.
The country needs to strengthen biosecurity because “avian flu, swine fever and food and mouth disease in some of our regions have impacted our economy, we are no longer able to send our meatstuffs to our region and globally because of these diseases”.
A future agricultural sector needs to be inclusive. “We need to build a cohort of young producers to participate in the value chain of agriculture, not only in production but in other value chains as well,” Didiza said.
“It’s important that we look specifically on how we respond to the needs of the young cohorts of today. We have to listen to what young people, the future of sector, are saying to us. Generally, young people feel our programme does not respond to them. Also the medium we use to communicate to young people is archaic.”
The minister said the challenges young people have raised with the department include access to land, market access and support services. “For us as government, it’s important to listen to what young people are saying, and provide solutions to enable them to succeed,” Didiza said.
In her budget vote in May, the minister said the government had allocated 436,563ha of the 700,000ha of state land the government plans to release for agricultural purposes. Of the land allocated, the department has issued leases for 206,765ha, of which 53,880ha (78 farms) were allocated to 211 women. Eighteen farms totalling 14,251ha were allocated to 131 youth people and one farm of 842ha was allocated to a person with disabilities.
A total of 116 farms, amounting to 127,743ha, are occupied by communities.
