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Black Farmers in South Africa Struggle Despite Agro-Sector Master Plan

Published September 26, 2023
9 months ago

The South African government has put forward a comprehensive agricultural development strategy — the Agriculture and Agro-processing Master Plan — in a bid to increase black ownership and the role of small-scale producers. However, black farmers are still struggling, primarily due to problematic access to suitable finance.

The Master Plan, the country's inaugural strategic multi-stakeholder plan, represents a crucial step towards amplifying transformation within the agricultural and agro-processing sectors.

However, farming remains a capital-intensive business, which overwhelmingly necessitates reliable access to financial support. Recent studies examining the funding issues experienced by smallholder vegetable farmers suggest financing interventions to date have been insufficient in scale and scope.

Certainly, it's not that funding is unavailable. The significant concern appears to revolve around whether the existing funding structure truly enables farmers to not only enter, but also successfully expand and grow within the sector. Substantial investments are often required in on-farm infrastructure such as farming tools, irrigation systems, and greenhouse tunnels. Coupled with short loan repayment periods, farmers can find themselves in debt before their ventures turn profitable.

Moreover, farmers often encounter difficulties navigating the bureaucratic loan application processes and meeting stringent requirements, subsequently limiting opportunities for securing necessary funding. A recommended solution is the provision of “patient” financing. Functioning on a longer-term basis, such an approach would recognize the extended timelines and inherent risks of agricultural operations.

The Master Plan is a commendable initiative. However, it requires practical, effective implementation. For smallholder farmers to truly benefit, emphasis needs to be placed on availing them reliable sources of finance to equip them with the necessary tools for brighter futures in the industry.

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