Finance empowers farmers to grow their businesses. The farmer’s relationship with the bank and other financial institutions is central to any operation. The farm financier works around the broader challenges in the agricultural environment, ranging from climate change to high input costs, and the specific difficulties unique to every farmer.
Partnerships between the finance sector and farming operations are critical to agriculture’s contribution to economic growth and food security. Nico Groenewald, head of Standard Bank’s Agribusiness division, says the bank’s partnerships with farmers are not limited to what the bank does from a financial perspective. “In our space we look for financial solutions that are fit for purpose for the individual farmer.”
Groenewald describes as counterproductive any financial partnership in which the bank dictates to the farmer what needs to be done. “We try to work through the farmer’s plans and help him translate his goals into financial speak… so, what the outcome would be in numbers,” he explains.
He says a farmer is expected to be many things, including a vet, a financial expert and a market guru. “We like to take all the relevant advice into the mix when we help farmers with financial planning. There needs to be a single outcome, with a number on the bottom line.”
African Farming’s Tony Ndoro points out that partnerships are a two-way street and pitfalls are possible in every partnership. The farming sector is no exception, and to avoid failed partnerships farmers should only deal with people and organisations they have good reason to trust. “Make sure you have a carefully selected network,” advises Groenewald, “and use that network to your advantage.”
Farmers are familiar with risk, working, as they do, with that most inconstant of partners, the weather. A single such high-risk partner is enough for any business. Farmers need to combine wisdom, experience and intuition, and form partnerships that will work to their advantage and eliminate constraints to growth.
For more information, visit www.standardbank.co.za/southafrica/business/products-and-services/business-solutions/industry/agribusiness