Established in partnership with the Department of Agriculture, Land Reform and Rural Development (DALRRD), its overall aim is to boost the participation of black producers and majority-black-owned enterprises in agricultural value chains and lead to greater black ownership and control of these chains.

Whom is the BFS aimed at?

It’s specifically for small- and medium-scale producers and agro-processors within the Land Bank’s mandate. The BFS seeks to support producers engaged in value chain and aggregation activities (such as farmer groups and smallholder enterprises). The objective is to help projects achieve sustainability and growth, and priority is given to projects with a high developmental impact.

Which commodities are targeted?

In line with the Agriculture and Agro-processing Master Plan (including aquaculture), the BFS is aimed at the following commodities:

• • Grains and oilseeds;
  • Fruits and nuts: citrus, deciduous and subtropical fruits, and nuts;
  • Livestock: poultry, piggeries and red meat;
  • Other food sectors / Agro-processing: dairy, sugar cane, aquaculture and vegetables;
  • Non-food sectors: wool and mohair;
  • Industrial crops: cotton.

Who is excluded from applying?

• • Politicians in public office (12 months’ cooling period);
  • Employees of government and state-owned enterprises (24 months’ cooling period);
  • Employees of all organisations serving as administrators of the scheme within credit providers;
  • Special advisors for agricultural programmes (local, provincial and national);
  • Foreign nationals, holders of dual citizenship, and illegal immigrants;
  • Part-time producers (even if they have a full-time farm manager or intend appointing a farm manager);
  • Politically exposed persons posing a reputational risk as identified through the credit provider’s lending policies, including but not limited to anti-money-laundering risk management and compliance policies;
  • Distressed producers where the grant is required to settle the debt of the distressed producer (at application stage);
  • Joint ventures with farmworkers where farmworkers are not involved in the management of the operation;
  • Joint ventures where targeted producers exercise less than 60% ownership and voting rights;
  • Producers who have mismanaged previous government support;
  • Applicants with no provision for farmworker profit-sharing.

Who qualifies for the BFS?

• • South African citizens with a valid ID and/or registered business entity;
  • Black-owned and managed farming enterprises that are commercially viable in commodities prioritised in the Agriculture and Agro-processing Master Plan (listed above) and aquaculture;
  • In the case of joint ventures, the non-black partner should have 40% but not less than 26% ownership in the enterprise;
  • Enterprises with (at least?) 10% farmworker profit-sharing.

Funding scope

• Acquisitions of primary agricultural land parcels and/or commercially viable agriculture sector value chain operating entities (agribusinesses);
• Support to existing operations for expansion in production on privately owned or land reform farms (brownfield and greenfield operations);
• The purchasing of capital equipment and infrastructure (capex);
• Working capital and/or production loans (production facilities);
• Insurance pool provision for subsidisation of insurance cover for the applicable farmers (capped at a maximum of 6% (six percent) of the total grant facility);

Key programme terms

• Applicants must meet the minimum criteria as stipulated by the economic benefits criteria scorecard from DALRRD for the conditional grant and also qualify and be approved for loan funding;
• Applicants must also meet the Land Bank credit criteria regarding the debt portion;
• Conditional grant funding will be capped according to the maximum grant sliding scale limits as approved by DALRRD, which shall be determined at the application stage based on the funding needs of the business;
• The conditional grant will not be approved on a standalone basis; grant funding must be in conjunction with Land Bank loan funding. Loans will be priced at market-related rates;
• Assessment and approval processes for the BFS will follow approved Land Bank lending policies and processes.

The economic benefits criteria scorecard explained

This scorecard allocates points to an applicant for ownership and transformation, inclusivity, own contribution through financial or non-financial means, employment creation, contribution to food security, sustainable development, localisation and markets. An applicant will need to obtain a minimum of 20 points out of a total of 50 points to qualify for the conditional grant.

To apply, visit landbank.co.za to contact your nearest branch.