By Maile Matsimela
Land Bank, a key financial institution in South Africa’s agricultural sector, offers a range of financial products and insurance solutions designed to support farmers of all sizes. The bank’s comprehensive approach to agricultural support combines innovative financing structures with risk management solutions, positioning the institution as a key enabler for empowering farmers of all sizes across South Africa. Through partnerships with government departments and a focus on transformation and inclusivity, Land Bank continues to play a vital role in the development and sustainability of the country’s agricultural sector.
Farmers gathered at the African Farming Financial and related Production Matters Workshop in Marble Hall on 5 June, were spoiled with information on how to access the funding. Representatives Desmond Ramonedi and Herbert Mokoena recently outlined the bank’s initiatives aimed at agricultural development, land redistribution and risk management for farmers across the country.
Blended finance schemes for agricultural development
According to Desmond Ramonedi, Land Bank has implemented a Blended Finance Scheme that combines grants and loans to assist farmers at different scales:
- Small-scale producers (annual revenue R50 000 to R1 million): 60% grant, 40% loan.
- Medium-scale producers (annual revenue R1 million to R10 million): 50% grant, 50% loan.
- Large-scale producers (annual revenue R30 million to R50 million): 40% grant, 60% loan.
These financing structures are tailored to accelerate land redistribution while providing critical funding for farm acquisitions, equipment, infrastructure and operational expenses. Importantly, loan repayment terms are designed to align with farmers’ income cycles, such as annual payments for crop production.
“We’ve structured these programmes to make agricultural financing more accessible and aligned with the realities of farming operations,” explained Ramonedi. “Our goal is to support sustainable agricultural development while promoting inclusivity in the sector.”
Specialised funding initiatives
Land Bank offers several specialised funding programmes:
Agro-Energy Fund
This programme assists farmers in installing solar panels to address electricity challenges, with similar grant-loan blending:
- Small-scale producers: 70% grant, 30% loan
- Medium-scale producers: 50-50 split
- Large/mega farms: 40% grant, 60% loan
Aggregator model
The bank encourages the consolidation of small-scale farms (e.g., farmers with 2-5 hectares) into cooperatives or registered companies, allowing them to access financing under favourable grant-loan structures.
High-value crops and livestock programmes
Farmers venturing into high-value crops, such as citrus, macadamia nuts and avocados, can receive an additional 40% grant through Land Bank in partnership with the Department of Agriculture. Similar financing arrangements are available for livestock purchases.
Agricultural insurance solutions
Herbert Mokoena highlighted Land Bank’s position as the second-largest provider of agricultural insurance in South Africa, with innovative products designed to protect farmers against risks.
Index Insurance
“We’re advocating for the adoption of index insurance, a product used globally in countries like Zambia, Nigeria, Kenya, the UK and the US,” Mokoena explained. This insurance protects farmers against yield losses due to drought and similar events:
- Application period: September to November
- Coverage period: November to March
- Payout timing: April
The product utilises Z-scores to assess vegetation levels periodically and determine payouts. Mokoena emphasised the need for government subsidies to make this insurance more accessible to farmers, like models implemented in other countries.
Broker Development Programme
Land Bank operates a Broker Development Programme supporting 250 broker businesses nationally and in broader Africa. These brokers facilitate insurance coverage for farmers across diverse regions.
“We’re committed to transformation in this sector,” noted Mokoena. “We’re identifying young farmers who can work as loss adjusters or assessors, ensuring better representation across regions and cultures.”
Farmer education and support
Both representatives emphasised Land Bank’s commitment to farmer education and support:
- Consumer education sessions offered at Land Bank’s expense.
- Network of offices and staff available to assist farmers, including farm visits.
- Training on financial products and insurance options.
Requirements for funding
To access Land Bank’s financial products, farmers need to provide business plans, cash flow projections, tax clearance certificates, proof of income, bank statements and Shareholder certificates (for companies).
Eligibility assessment is based on the applicant’s financial behaviour, character, repayment reliability, and agricultural credentials, with flexible repayment structures and interest rates based on individual circumstances.
