FINANCES
Development farming funding and how to access it?
Farming is a business. Like any business, farming businesses require funding in order to
perform at peak productivity.
Kefiloe Manthata
Senwes Journalist
The difference between a farm
that is thriving and one that is
struggling, is more often than
not, access to finance, which makes it
possible for farmers to attain mechanisation
that plays such an important role in
advancing the productivity and effectivity
of a farming operation. There are several
avenues farmers can explore when seeking
assistance with access to finance in
the agricultural sector.
Umsombovu Youth Fund
The youth fund offers grants to youth
projects for persons between the ages
of 18 and 35 years. Grants are allocated
exclusively to projects run by the youth
(18-35yrs) and funds are provided for
production inputs only. To apply to the
Umsombovu Youth Fund, applicants can
download an application form from their
website or obtain a form from any of their
offices.
Eskom Development Foundation
The Eskom Development Foundation
assists with training on business conduct,
financial management and project management.
The training is offered on request
to small business enterprises. Eskom also
offers a unique funding opportunity for
the agricultural sector with their Business
Investment Competition (BIC) in an effort to
boost enterprise development.
With R1,3 million worth of prizes up for
grabs in the competition, finalists get to
compete to win their share, which they
must use to improve their businesses.
The overall winner takes away a
R150
000 cash prize. Winners of each sector
receive R100 000 - the first runners-up in
each of the sectors receive R50 000 while
the second runners-up each receive R25
000. All other finalists receive R5 000
each.
SA Breweries
The SAB Foundation provides funding for
small, medium and micro-sized enterprises
in order to contribute to the economic
and social empowerment of historically
disadvantaged persons through entrepreneurship
development. The organisation
has provided more than R67 million in
support of 163 social innovations and disability
businesses
This is a project aimed at instilling a culture
of entrepreneurship among young
people between the ages of 18 and 35 by
promoting business awareness through
training, providing grants as start-up and
providing mentorship and assistance
during the setting-up phase of the business.
The competition usually opens in
May of each year.
Social Development
For community farming projects, the
Department of Social Development assists
with getting funding for subsistence farming
operations managed by small groups.
Funding is given to groups of at least five
members. Social Development will assist
in registering the group as a non-profit
organisation (NPO) and getting funding
for their specific projects.
Department of Trade and Industry
The Department provides financial support
to qualifying companies in various
sectors of the economy. The fund is said
to be aimed at accelerating the quantitative
and qualitative increase and participation
of black industrialists in the national
economy, selected industrial and agricultural
sectors and value chains. Apart
from just financial investment, this initiative
offers post-investment mentorship, specialised
training and specified guidance
to ensure the sustainability of the business
enterprises funded through this channel.
Department of Agriculture, Forestry and
Fisheries
Agri-BEE Fund
The Agri-BEE fund is the brainchild of
the Department of Agriculture, Forestry
and Fishing. The main aim of this fund is
to promote the entry and acceleration of
developing farmers into the commercial
agricultural space. Through the provision
of funding for equity deals, acquisition of
financial implements and business development,
the fund helps black farmers
participate vigorously in the agricultural
value chain. The fund makes provision
for marginalised groups, i.e. women and
youth farmers and people with disabilities
to gain access to funding that gives them
a competitive edge in the industry.
Micro Agricultural Financial Institutions
of South Africa (MAFISA)e
Mafisa is a grant given to qualifying
emerging farming co-operatives to help
them acquire competitive business
development services. The grant allocation
aims to address the lack of working
capital, access to finance, participation
in the formal economy by co-operatives,
especially those owned by black people -
women, youth, persons with disabilities.
Land and Agricultural Development
Bank of South Africa
The Land Bank is the most prominent
financier in the South African agricultural
sector. The bank considered an agricultural
development financial institution.
Land Bank supports economic growth
through the provision of agricultural financial
services by means of operating in
the money market. Land Bank’s broader
objective is to contribute to rural development,
stability, social upliftment and job
creation in South Africa. The Land Bank
offers tailor-made finance solutions ranging
from short-term to long-term loans to
suit the needs of each applicant.
SENWES SCENARIO | WINTER 2020 7