Land reform: ‘Affordable’ financial products for farmers imminent?

Government is ‘urgently’ finalising the design and delivery of ‘a suite of affordable products for farmers’ that will be ‘strengthened’ by ‘deliberate partnerships with the private sector’ aimed at attracting ‘new capital for agricultural financing’. This is according to the official version of Deputy President David Mabuza’s response to a request for information on efforts to ‘fast-track land reform’ and coordinate the necessary agricultural support programmes. It formed part of the Deputy President’s input during this week’s routine question-and-answer session in the NCOP, when he also referred to ‘blended financing’ as one of the ‘products’ envisaged – along with farm insurance, ‘working capital’ and farm expansion funding, notes Pam Saxby for Legalbrief Policy Watch. 

The term ‘blended finance’ is defined by the Organisation for Economic Co-operation and Development as ‘the strategic use of development finance’ to mobilise additional funding from private investors for ‘sustainable’ programmes in ‘developing countries’. This is presumably what Mabuza meant by his reference to ‘deliberate partnerships with the private sector’, begging the question: Will blended finance be offered as one of the envisaged ‘suite of affordable products for farmers’ or will it be used to support the entire intervention? Perhaps Mabuza clarified this during the ensuing debate. If not, it is yet another example of a tendency for some Cabinet members to sow confusion around complex issues associated with the ‘agricultural revolution’ promised by President Cyril Ramaphosa at his final pre-election rally in May (News24).

In the NCOP this week, the Deputy President trotted out what has now become familiar rhetoric about land as a ‘productive asset’ that, when ‘restored to its rightful owners’, must be ‘utilised optimally’ so that it continues to ‘contribute’ towards the achievement of SA’s ‘broader economic and developmental goals’. ‘For this to happen, we must ensure that … post-settlement support (programmes) … (for the) beneficiaries of land reform are effective,’ Mabuza said. He then rattled off a long list of interventions already either works-in-progress or reasonably well established, including ‘extension services, research and technology transfer, mechanisation, production inputs (for subsistence and small holder farmers), finance and market access’ – along with dams, irrigation systems and other infrastructure ‘essential’ to achieving ‘higher levels of production’.

According to the Department of Rural Development & Land Reform’s 2019/20 annual performance plan, nine agri-hub units, 29 farmer production support units and an unspecified number of ‘related projects’ will be in place before the end of the financial year. While the Deputy President’s response document did refer briefly to farmer production support units, this was in the context of their linkage to ‘service centres’ apparently yet to be established with the aim of facilitating access to ‘tractors and other implements’ falling under the umbrella of ‘mechanisation support’. Yet the annual performance plan makes no mention of these, while Mabuza said nothing about agri-hubs. This mismatch of already worryingly vague information on such critically important matters requires attention.