24 May 2024
Farmers, partners and other stakeholders expressed their delight at the Land Bank’s progress.
The Land Bank has approved 154 applications to the value of R980 million and has disbursed R710 million to 99 black farmers through its blended finance programme since April last year. This was said by Themba Rikhotso, the Land Bank CEO, at an event hosted by the bank during the NAMPO Harvest Day celebrations in Bothaville, Free State.
Rikhotso said his team and the board have put in a lot of work to turn around the Land Bank, forging partnerships to improve its services and ensure it delivers on its mandate as an agricultural development bank. It is processing applications worth R2 billion and high demand for blended finance means new targets have been set for the coming year for loan approval and disbursement.
According to Rikhotso, the biggest challenge has been rebuilding the image of the bank and regaining trust in the market.
Dewald Olivier, CEO of Red Meat Industry Services (RMIS), shared the podium with Rikhotso and expressed the industry’s delight at the progress being made to rebuild the Land Bank. Olivier mentioned a massive improvement since the start of the blended finance rollout, particularly for those who have already received the funds. He also acknowledged the challenges and admitted that neither the Land Bank nor the industry would be able to help everyone.
Olivier used the analogy of starfish on the beach to explain their approach, saying that although they may not save every one, they make a difference to the ones they do save. He emphasised the need to start somewhere and highlighted the positive impact the Land Bank has had on those it has helped. Olivier stressed the importance of collaboration to expand the pool of people the industry can assist.
According to Olivier, RMIS is exploring alternative ways to finance livestock without requiring land as collateral. He stressed the need to think creatively and consider technology and unconventional solutions to provide adequate financing for individuals without property. “This will enable these farmers to generate enough income to eventually purchase their own properties,” said Olivier.
Dr Taki Masiteng, head of the Free State Department of Agriculture and Rural Development, expressed satisfaction with the Land Bank’s efforts to reclaim its position as a preferred development finance institution. But he said more work is needed. He highlighted the need to maximise the use of loans, grants and other facilities to support production inputs for commercial and smallholder farmers.
Masiteng also stressed the importance of revisiting the bank’s risk mitigation strategies. He pointed out that while providing funding is important, it is equally crucial to address factors such as veld fires, floods, droughts and disease outbreaks. “We need to invest more in research and innovation, including developing new technology for drought-resistant cultivars to mitigate risk,” he said.
He also emphasised the need for market access, facilitation and the development of infrastructure, such as irrigation systems, storage facilities, roads and energy.
Sakhumzi May, Land Bank’s chief economist, acknowledged that the bank has faced challenges, particularly in an industry that has been exposed to risks in recent years. May said some of these challenges were beyond anyone’s control, especially rising input costs due to geopolitical events like wars in the Middle East and Ukraine.
“This has driven up the prices of inputs such as fertiliser. At Land Bank, we have taken it upon ourselves to look at how we can cushion our farmers, both commercial and smallholders, against these challenges by examining the facilities that we have provided to them. We make adjustments considering inflationary increases and, above all, ensure that they remain in business,” said May.
He added that the bank continues to monitor affordability for its clients amid high interest rates. “As a bank, we have to reassess our clients’ affordability and see how we can support them.”
May said amid outbreaks of diseases such as avian influenza and foot and mouth, which have had a major impact on farmers’ revenue generation, the Land Bank worked to support them. “During previous outbreaks we have had to come up with ways to support the farmers, such as implementing payment deferrals,” he said.
Rikhotso said these challenges have placed significant pressure on the Land Bank. “We constantly have to consider risk mitigation and how to support farmers through these challenges. In the past 12 months, we have developed assistance packages worth R700 million for our farmers who were facing difficulties,” said Rikhotso.
