State backs small-scale farmers with R1-billion funding injection

Small-scale farmers severely hit by the Covid-19 pandemic and resultant eight-month lockdown will receive financial support from the government through a R1-billion agricultural industry relief programme. 

Agriculture, Land Reform and Rural Development Minister Thoko Didiza said at a media briefing on Monday, 7 December that the government would provide small-scale farmers with cash handouts worth between R1,000 and R9,000. The handouts are expected to help 75,000 farmers tend their small-scale farms.

Although the relief for farmers was announced in early December, Didiza has now costed the financial package and set aside R1-billion. The relief programme is specifically for small-scale farmers, whom Didiza said “utilise land in the back yards of their homes [or] gardens in communal areas” to farm.

Unlike their large and established counterparts, small-scale farmers are usually excluded from supermarket supply chains and government policies that offer support to the broader agricultural industry. Commercial lenders also overlook small-scale farmers because they don’t usually have valuable or liquid assets to use as collateral for loans.

The Land Bank, a state-owned lender, is supposed to, according to its mandate, back emerging and small farmers. But the Land Bank’s financial troubles have become so big that it cannot afford to extend new loans to farmers – thus suspending this function.

https://www.dailymaverick.co.za/article/2020-11-26-its-lenders-versus-treasury-in-a-race-to-save-the-land-bank-from-collapse/

Underscoring the importance of small-scale farmers and the pressures they face, Didiza said: “While the agricultural sector was negatively impacted [by the lockdown], subsistence producers [or farmers] and household producers remain the most affected.

“It is these producers who create a bulwark against the fight of food insecurity at a household level. These are producers who do not earn any other income, but these small patches of land remain their source of employment and livelihoods.”

Asked if the funding of between R1,000 and R9,000 was sufficient considering that farming is capital-intensive, Didiza said the range sufficed for farmers with small operations. 

“Based on our other food security programmes... some farmers need R2,000 for them to be able to produce,” she said.

Ramaphosa’s economic recovery plan

The R1-billion relief programme is part of President Cyril Ramaphosa’s wide-ranging recovery and reconstruction plan that aims to embark on a mass employment programme and reindustrialisation of the economy. The plan also targets the agricultural industry by providing financial support to farmers to save jobs and create new ones. 

The agricultural industry has been a shining star of the SA economy, even during the hard lockdown. In recent months, the agricultural industry has been a positive contributor to SA’s gross domestic product, with the industry’s economic activity growing by 27.8% in the first quarter of 2020, and 15.1% in the second quarter.

Applications for funding under the relief programme will open on 10 December and will close on 22 December. Didiza said her department would take 150,000 applications and “the principle of first come, first serve per province will apply”. Funds will be distributed to qualifying farmers between January and March 2021.

To qualify for funding, Didiza said applicants should be 18 years or older, have a South Africa identification document, not be employed by the government, be currently actively involved in agricultural production and not have received prior support from her department in the current financial year. 

The relief programme will target vulnerable individuals and groups, aiming to support 50% women, 40% youth and 6% persons with disabilities. Didiza said the amount awarded would depend on, among other things, the type and size of the current farming operation, which will be physically verified on site.

Application forms for funding can be accessed by dialling *134*4536# from a cellphone and are available in all 11 official languages. DM/BM