The editor of African Farming, Lebogang Mashala, deserves support for his call for urgent intervention by the President, the Minister of Finance, the Minister of Agriculture and the Minister of Land Reform and Rural Development to address the Land Bank’s funding crisis.
By Madoda Sambatha, MEC for Agriculture and Rural Development, North West
I support the call for the Land Bank to be bailed out, not because of comparisons with other sectors or previous interventions, but because failure to intervene could have devastating consequences for the bank, affected farmers and the broader agricultural economy.
The Land Bank has openly indicated its Blended Finance Scheme has exhausted its available funding, with a shortfall of R325 million. While this amount may appear relatively small, its implications are far greater than the figure suggests.
There is already a loan component on the affected farmers’ financing that they may still be expected to service. The interruption of the grant component therefore has significant financial and economic implications. Farmers could struggle to secure the resources needed for the coming planting season, with consequences for production, employment and the sustainability of their businesses.
This is bigger than the Land Bank
As we call for Cabinet intervention, we must be clear about what is at stake.
This is not simply a call to rescue the Land Bank. It is a call to protect the agricultural sector by closing a funding gap that could have consequences for the bank, affected farmers, farm workers, farming families and the wider economy.
If affected farmers cannot access the funding they were expecting, some may struggle to prepare for the planting season. And if they cannot plant, there will be no harvest. Without a harvest, there is reduced economic activity, fewer employment opportunities and potentially less food entering the market.
The agricultural sector is already dealing with the devastating effects of the foot-and-mouth disease crisis, while international trade conditions continue to present challenges for South African agriculture.
Against this backdrop, allowing a funding crisis of this nature to deepen could create consequences far beyond the original R325 million shortfall.
Protecting the planting season
The urgency of the situation lies partly in timing.
Agriculture operates according to production cycles. A missed planting window cannot simply be recovered by providing funding several months later. The consequences can extend throughout the production cycle, affecting harvests, cash flow, employment and the ability of farmers to remain financially sustainable.
Farmers are also confronting the possibility of adverse climatic conditions. Should an El Niño event materialise, drought could place additional pressure on agricultural production and food security.
This makes preparedness particularly important. Farmers need the resources to plan and produce, rather than being forced to respond to crises after they have already occurred.
This is not about political blackmail
The call for Cabinet intervention must not be framed as political blackmail by pointing to sectors that have previously received bailouts.
The argument is much more fundamental.
The consequences of allowing this crisis to continue could extend across the agricultural value chain. It affects farmers, their families, farm workers, input suppliers, service providers, markets and ultimately the broader agricultural economy.
It is therefore in the national interest to prevent the problem from becoming a much larger crisis.
The situation is particularly concerning because the exhaustion of the funding was communicated late, and affected farmers were informed only after the problem had materialised. Farmers had made production plans based on the expectation that the blended-finance support would be available.
They now face uncertainty at a critical point in the agricultural production cycle.
A call for urgent and lasting intervention
The North West agricultural sector cannot afford to see farmers who have been working towards commercial sustainability fall back because of a funding interruption they could not have anticipated.
The consequences will also place pressure on provincial departments, which may be expected to respond to farmers affected by the crisis despite the fact that the problem originated elsewhere in the agricultural financing system.
On behalf of farmers and the broader agricultural fraternity in the North West, we therefore support the call for the President, the Minister of Finance, the Minister of Agriculture, the Minister of Land Reform and Rural Development, and the Minister of Trade, Industry and Competition, through Cabinet, to urgently find an emergency intervention.
At the same time, there must be a lasting solution to ensure the same problem does not recur.
This is not simply about saving the Land Bank.
It is about protecting farmers, safeguarding jobs, sustaining agricultural production, protecting food security and ensuring South Africa’s agricultural sector remains economically competitive.
Disclaimer: The opinions expressed in this article are those of the author and do not necessarily reflect the views of African Farming, its publisher, editors, employees, affiliates or associated partners.
Also read:
‘Our farmers need you now’ – open letter to President Ramaphosa, Minister Godongwana and Minister Aucamp
When funding pauses but planting cannot: the Land Bank crisis farmers cannot afford
Farmers left stranded as Land Bank pauses Blended Finance Scheme – with planting season days away
Beyond the ‘No Land Bank buyers’ debate
