The Eastern Cape Department of Rural Development and Agrarian Reform (DRDAR) has introduced innovative funding mechanisms to support the commercialisation of Black farmers.
Rural Development and Agrarian Reform MEC, Nonceba Kontsiwe, said the department established the Eastern Cape Agriculture Blended Funding Scheme to provide access to finance for Black farmers to become commercial and participate in the value chains.
This was made possible through collaboration with the Eastern Cape Rural Development Agency (ECRDA), Eastern Cape Development Cooperation (ECDC), Small Enterprise Finance Agency (SEFA) and Land Bank.
In 2023/24, DRDAR and ECDC distributed R32 million to 18 agricultural enterprises, creating 455 jobs.
The funding has enabled businesses to invest in equipment, infrastructure, and production inputs, enhancing their revenue.
“We are committed to this initiative with a budget of R75 million allocated to attract equal or more funding from development finance institutions (DFIs) and the private sector over the Medium‐Term Expenditure Framework (MTEF). The budget for 2024/25 is R25 million,” Kontsiwe said.
The department recently entered into an agreement with the Land Bank to collaborate on funding and developing clustered and aggregated commodities value chains in the province.
“This collaboration aims to facilitate access to affordable funding for farmers without stringent terms to support primary and agro-processing activities, to enable Eastern Cape farmers to access the R300 million allocation from the Land Bank.
“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,” Kontsiwe said.
Kontsiwe added that the department, in partnership with the ECRDA, aims to support Black commercial farmers in exporting their produce to international markets, thereby boosting their competitiveness.
“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. A budget of R4 million has been earmarked for the ECRDA to implement this program in the 2024/25 financial year, serving as an incentive to attract more Black commercial farmers to participate in export markets,” the MEC said. – SAnews.gov.za
