 Rent farms to aid black farmers — Land Bank Radical policy departure mooted to boost ownership, proficiency THE government should consider renting farms for a few years, with an option to buy them, so that it can accelerate transferring land to black farmers and stem the failure of land reform projects, the Land Bank argues. The proposal is made in a research report released yesterday, the bank’s first analysis of the viability of emerging farmer financing and support systems in more than five years. The report found that almost half of SA’s small-scale farmers funded by the bank were unable to cultivate their land profitably. If SA’s food security was to be guaranteed, there was an urgent need to ensure that recipients of the government’s land reform programme were productively using their land. The government’s failure to develop farmers has prompted the African National Congress Youth League to call for expropriation of land without compensation. Dr Moraka Makhura, head of agriculture economic research and innovation services at the bank, said SA’s agricultural industry was risky and unfriendly to emerging farmers. The Department of Agriculture, Forestry and Fisheries needed to review its smallholder farmers’ development plan, to reduce the rate of failing land reform projects. The Land Bank study found that, based on its loan book alone, the success rate of emerging farmers was between 43% and 57%. Failure patterns were higher in smallholder farming communities such as Tzaneen in Limpopo, several areas in the Eastern Cape, grain and livestock production in North West, farms in Mpumalanga and among Pietermaritzburg sugar producers. Land Bank adviser Dr Japie Jacobs said the failure rate rose when emerging farmers had no business plan, which often led to high debt-asset ratios. The state needed to screen candidates for "agricultural land" distribution carefully, ensuring that most beneficiaries had practical farming skills and experience. Unless land recipients were vetted, institutions such as the Land Bank would need additional funds for farmer incubation programmes, Dr Jacobs said. Government guarantees should be provided to increase emerging farmers’ creditworthiness, and other forms of supplementary capital to build their capacity. Dr Jacobs also recommended that older debts be cancelled and the agriculture department compensate the bank for the resettlement of farmers’ debts. He suggested accounts opened from 1997 to 2003 be written off as prices were low during that period, and those opened from 2003 to 2005 receive a 50% debt reprieve because of several natural disasters in that time. Dr Makhura said state institutions had not been responsive to farmers’ problems. The economic environment did not accommodate emerging farmers and some had unviable farms lacking basic infrastructure. The study showed farmers who succeeded either had agricultural training or were retired professionals with resources. Prof Zerihun Alemu of the Development Bank of Southern Africa criticised the study for not looking beyond Land Bank clients. By focusing on defaulting clients, whose debts totalled R429m, the research failed to present an understanding of "the plight of the majority of emerging farmers". While the government wanted the land reform programme to drive the agricultural transformation agenda, the real dilemma was that it had to be politically and economically viable. Unfortunately it was not clear how, and "what should take precedence over what", Prof Alemu said. [email protected] -- You are subscribed. This footer can help you. Please POST your comments to [email protected] or reply to this message. You can visit the group WEB SITE at http://groups.google.com/group/yclsa-eom-forum for different delivery options, pages, files and membership. To UNSUBSCRIBE, please email [email protected] . You don't have to put anything in the "Subject:" field. You don't have to put anything in the message part. All you have to do is to send an e-mail to this address (repeat): [email protected] . |
