Following the demise of the Land Bank, agricultural financing continues to be one of the most challenging problems facing South African farmers.
Many people will remember 2020 as the year of the Covid-19 pandemic. However, farmers will remember it as the year the Land Bank went bankrupt and they were left with a sense of financial distress.
In April last year, the Land Bank told its creditors that it would default on the R50 billion scheduled payment.Various private sector entities since then have stepped in to fill the void left by the Land Bank.
Saai a family agricultural network recently conducted a webinar to connect farmers and agri-businesses to a number of these entities. According to Dr. Theo de Jager, chairperson of the Saai board, said they’re still looking for a method to get more of them in, but it’ll cost the farmer a little more.
In the short term, forward purchasing products, notably from importers in the United Arab Emirates and elsewhere in the Middle East, is another option.
“There is a lot of promise here,” de Jager said, “but it will do little to ensure national food security in South Africa.”
It has been reported that Rabo Bank, located in the Netherlands and with a presence in a number of adjacent countries, is interested in expanding its operations into the South African agricultural industry.
Saai’s long-term ambition, on the other hand, is to establish a cooperative bank in South Africa that will be owned by farmers.