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South Africa - Bailout for black farmers

02 Oct 2009

 Agriculture, forestry and fisheries minister Tina Joemat-Pettersson announced her officials are wrapping up the first phase of a bailout package for hundreds of black farmers facing foreclosure by Land Bank.
At a Portfolio Committee hearing on 16 September, she told parliament that two deputy directors-general were spearheading a fact-finding mission to farms, with 77 farms earmarked for emergency rescue. She expected the number to rise to about 200.
However, the department cannot intervene if farms have been abandoned by farmers, and the Land Bank is advised to repossess them.
 The Department of Rural Development and Land Reform will take over ownership of the farms and hold them as state land for three years through the Proactive Land Acquisition Strategy (Plas). Repayments would recommence after three years. Farmers with the proven ability to farm productively and profitably will be allowed to keep working the land. They’ll receive assistance from the agriculture department, through an initial rescue package of subsidised inputs and infrastructure.
The second phase will consist of partnerships with commodity organisations and farmers’ unions for market access and management support. Institutions and organisations such as the Agricultural Business Chamber have come on board, Joemat-Pettersson said.
Assistance will go first to farms in KZN, the Eastern Cape, Mpumalanga and Limpopo, because evaluations in those provinces have already been done. Farmers in the Western Cape, Northern Cape, Free State, Gauteng and the North West can expect their support package to arrive in December after officials had assessed these provinces.
An initial amount of R146 million has been set aside to take over these farmers’ production loans and develop farm infrastructure. Joemat-Pettersson stressed there will be no moratorium on loan repayments.
The funds will be drawn from the Micro Agricultural Financial Institutions of South Africa (Mafisa) fund, which is meant to provide small loans to black farmers at subsidised interest rates. The money will be set aside as a holding fund for the farmers’ debt, and used to offset it, she said.
Once rescued farmers were productive again they will have to repay their loans, as Mafisa funding has to be recouped.
Joemat-Pettersson said the departments of agriculture, finance and rural development are treating the bailout as crisis management. They’re putting mechanisms in place to ensure the crisis does not recur.
She also conceded extension services in her department were weak and capacity needed to be beefed up. New technologies, including blue tooth and GPS, are being piloted to improve performance, she said. – Stephan Hofstätter

Source: farmersweekly.co.za

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