Stronger collaboration between government, the private sector and development finance institutions is needed to accelerate the transformation and commercialisation of black farmers in South Africa, says the Kgodiso Development Fund (KDF).
By Lebogang Mashala, editor at African Farming
This emerged during the fund’s stakeholder engagement breakfast and launch of its 2025 integrated report held in Johannesburg on Monday 25 May, where stakeholders, farmers, business leaders and government representatives reflected on the organisation’s achievements and future ambitions.
According to the report, KDF has approved R92 million in loans to 96 farmers and businesses since its establishment four years ago, while applications worth a further R144 million are currently under assessment.
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Inclusive growth through agriculture
Tumisang Matsheke, vice president for supply chain at PepsiCo Southern Africa, said South Africa’s unemployment crisis continues to place immense pressure on young people and small businesses, making inclusive economic growth more urgent than ever.
Matsheke said KDF’s investment in black farmers, agricultural entrepreneurs and small businesses has the potential to unlock opportunities, stimulate rural economies and create sustainable jobs.
“KDF holds the belief that growth must be inclusive and investment must create lasting impact. Transformation is not something we should only speak about in boardrooms. It must be visible on farms, in classrooms, factories and communities across the country,” he said.
He said PepsiCo’s acquisition of Pioneer Foods in 2020 for US$1.7 billion, one of the company’s largest investments outside the United States, was not merely a business transaction, but a strong vote of confidence in South Africa’s agricultural and manufacturing sectors.
According to Matsheke, PepsiCo committed R600 million following the acquisition, with R300 million directed towards agriculture and R200 million allocated to education and skills development.
“Agriculture and education sit at the heart of our business, but more importantly at the heart of our nation’s future,” he said.
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Investing in youth and market access
Matsheke highlighted the impact KDF is already making through bursaries, apprenticeships, learnerships and skills development opportunities for young South Africans.
“We are seeing the development of future agronomists, engineers, artisans and commercial leaders. Young people are gaining not only qualifications, but confidence, exposure and pathways into meaningful careers,” he said.
He also stressed the importance of market access for emerging farmers and small businesses, saying large companies should do more than simply provide funding.
“One of the most important contributions large organisations can make is opening markets for these businesses. Through PepsiCo’s scale, manufacturing capability and distribution footprint, we are helping emerging farmers and SMEs participate meaningfully in formal value chains,” he explained.
Matsheke said market access goes beyond procurement and includes mentorship, technical support, compliance with standards and building long-term competitiveness.
“True empowerment is not created through dependency, but through participation,” he added.
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Call for catalytic capital
The fund was deliberately established to move black farmers “from the fringes and peripheries” into commercial agriculture, said KDF board chairperson Setlakane Molepo. “The future of inclusive agricultural development in South Africa will require greater pools of catalytic capital.”
He called on government, the private sector, development finance institutions and international investors to work together to strengthen agricultural transformation.
“No single institution can carry this burden alone. KDF presents a compelling model because it demonstrates that development finance can be disciplined, transparent and impactful,” he said.
Molepo also highlighted KDF’s partnerships with institutions such as Stellenbosch University, the University of Limpopo, the University of the Free State and North-West University, saying these collaborations are investments in innovation and the future intellectual capital of agriculture.
He further pointed to the Vine Academy in Upington as an example of initiatives aimed at attracting young people into agriculture and creating awareness about opportunities within the sector.
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Government calls for stronger partnerships
Mcedisi Madolo, chief director at the Gauteng Department of Agriculture and Rural Development, agreed that more collaboration is needed to strengthen farmer support initiatives.
Madolo referred to government support programmes such as Ilima/Letsema and the Comprehensive Farmer Support Programme, which are aimed at helping farmers transition into commercial agriculture.
He called for meaningful partnerships between government and development organisations to ensure emerging farmers receive the support needed to grow sustainable agricultural businesses.
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