MEC of the Eastern Cape Department of Rural Development and Agrarian Reform (DRDAR), Nonceba Kontsiwe, said government is dedicated to supporting the growth of black commercial farmers.
She stated they have introduced innovative funding mechanisms, known as blended finance, in collaboration with the Eastern Cape Rural Development Agency (ECRDA), the Eastern Cape Development Corporation (ECDC), the Small Enterprise Finance Agency (SEFA) and Land Bank to support the commercialisation of black farmers.
Eastern Cape Agriculture Blended Funding Scheme
The department established the Eastern Cape Agriculture Blended Funding Scheme to provide access to finance for black farmers to become commercial and participate in value chains.
In 2023/24, DRDAR and ECDC distributed R32 million to 18 agricultural enterprises, creating 455 jobs. This has enabled businesses to invest in equipment, infrastructure, and production inputs, enhancing their revenue. The initiative is supported by a budget of R75 million, aimed at attracting equal or more funding from Development Financial Institutions (DFIs) and the private sector over the Medium Term Expenditure Framework (MTEF). The budget for 2024/2025 is R25 million.
The department has recently entered into an agreement with the Land Bank to collaborate on funding and developing clustered and aggregated commodity value chains in the province, said Kontsiwe.
This collaboration aims at facilitating access to affordable funding for farmers without stringent terms to support primary and agro-processing, enabling Eastern Cape farmers to access the R300 million allocation from the Land Bank.
According to Kontsiwe, the finalised aggregation model and financing tools will be tested in pilot projects for grains, wool, mohair, citrus farming, dairy, vegetables and livestock in the province.
Commodity revolving credit facility for export-oriented commodities
The revolving credit facility is designed to offer operational funding to address the financial needs of high-value and export-oriented commodities during production cycles.
The department, in partnership with the ECRDA, aims at supporting black commercial farmers in exporting their produce to international markets, thereby boosting their competitiveness. A budget of R4 million has been earmarked for the ECRDA to implement this programme in the 2024/25 financial year, serving as an incentive to attract more black commercial farmers to participate in export markets.
