The Land Bank will use profits on a pilot project which provides funding and support to those emerging farmers with the right levels of expertise.

The Land Bank has lifted its profits by 40 percent during its financial year and intends to use some of this money to embark on a pilot project to provide government-backed loans to emerging farmers that might take several years to generate profits.

Bank chief executive Phakamani Hadebe says the programme would be undertaken in partnership with the Department of Rural Development and Land Reform as well as with the Department of Agriculture.

The bank says there is about R1 billion that will be spent on projects to develop, fund and create new industries for emerging farmers. Hadebe says that the availability of credit to emerging farmers was central to the agricultural sector’s development prospects and for the country’s food security.

The new model of providing government-back loans would see a change in the land reform processes with the government no longer just “giving away land” but rather providing funding and support to those emerging farmers with the right levels of expertise.

Hadebe claims the most successful agricultural sectors in other parts of the world received financial backing from state institutions and the success of white farmers in South Africa could be attributed to the assistance they received under the apartheid government.

The Land Bank was originally created just before the Land Act of 1930 with the sole purpose of assisting farmers and providing funds to them. Rural Development and Land Reform Deputy Minister, Thulasi Nxesi says the bank should continue with the mandate but should now fund emerging farmers.

According to Hadebe, the Land Bank’s performance during its financial year had shown significant improvements mainly as a result of a sharp decline in non-performing loans.

Its net income for the year to March rose to almost R270 million while non-performing loans dropped by 5.6 percent to R1.7 billion. 

Readers' Comments Have a comment about this article? Email us now.