On 29 September, Land Bank told Parliament’s Portfolio Committee on Agriculture that it had temporarily paused new Blended Finance Scheme (BFS) applications after the full R325 million grant allocation provided by the Department of Agriculture for the 2026/27 financial year had already been committed. This follows a substantial funding shortfall.
This has again brought into question the ability of Land Bank to fulfil its developmental mandate as demand for its BFS exceeds available funding, and concerns persist about whether finance reaches farmers when they need it.
The same committee was told earlier this year that the scheme required about R1,5 billion annually to meet demand, while R613 million had been allocated for 2026/27. The committee also raised concerns about the over-commitment of available funds.
For the past few weeks, Parliament warned that funding shortages, weak oversight and delays threatened the programme’s ability to commercialise black farmers and advance transformation.
‘Key institution’ in transformation
Athol Trollip, ActionSA MP and member of the Portfolio Committee on Agriculture, told Farmer’s Weekly that Land Bank remained a key institution in agricultural transformation and rural development. However, he argued that shortcomings in the implementation of land reform, agricultural development and agricultural finance were preventing these objectives from being effectively achieved.
According to Trollip, the first challenge was the selection of beneficiaries for funding, which he said was “not always done appropriately or based on merit and potential”.
A second challenge was the inadequate agricultural extension and technical support from the departments responsible for agriculture and land reform. He added that if beneficiaries did not receive the required technical support, they could struggle to establish and maintain viable businesses. This particular concern has featured in previous parliamentary engagements.
In 2024, for example, Trollip questioned what technical support and skills development were provided during the post-approval and post-funding phases of blended-finance programmes. The portfolio committee subsequently called for beneficiaries to receive technical assistance, mentorship and market access alongside finance.
Due diligence questioned
Trollip was particularly critical of the assessment of projects before finance was approved. He cited a pecan nut operation visited by the committee during an oversight visit to North West as an example.
According to Trollip, the irrigation pivots on the property were obsolete and not functioning, while the area planted to pecan trees and planting density had not been properly assessed. He argued that shortcomings such as these could place beneficiaries at a disadvantage from the outset.
The portfolio committee independently raised concerns following its North West oversight visit about whether adequate due diligence had been conducted before funding was approved. It subsequently called for stronger monitoring and accountability.
However, Land Bank said that it has strengthened both pre- and post-finance support, including more site visits, mentorship programmes, technical assistance, stronger due diligence, improved market-access support and monitoring dashboards.
The bank also acknowledged that some funded businesses face operational, climatic, infrastructure and market-related challenges, but maintains that most funded projects remain operational and continue contributing to agricultural production and rural economic participation.
Farming cannot wait for funding cycles
The timing of agricultural finance was one of Trollip’s biggest concerns.
“Farming is a seasonal activity and certain crops can only be successfully planted in specific window periods,” he said.
He referred to grain farms visited by the committee in North West where, according to him, applications for funding to plant maize had been submitted timeously, but BFS finance was not released within the required planting window.
Trollip said farmers subsequently requested permission to use approved finance to plant sunflower instead, because its planting window remained viable. According to him, the request was refused and maize was planted too late, resulting in yields that failed to cover production costs.
The broader problem of delayed disbursement has also been documented by Parliament. The committee reported other cases in which farmers received funding after planting windows had closed, negatively affecting productivity and increasing their financial risk.
Land Bank reported an average turnaround time of 59 working days from initial application assessment to a credit decision. It says processing times vary according to transaction complexity, the quality of supporting documentation and the developmental assistance required by individual applicants.
Citrus farmers also affected
Trollip said similar timing problems had been observed in the Eastern Cape’s citrus industry. He alleged that there were cases in which fruit remained unharvested because finance was either approved too late or unavailable when producers needed money for harvesting.
Without working capital to pay harvesting teams and operate state-funded packhouses, fruit could remain on trees and become vulnerable to pests and deterioration, he said.
The delay in funding is now particularly relevant to grain producers preparing for the 2026/27 season, with some farmers, who prefer to stay anonymous, confirming to Farmer’s Weekly that they have already incurred costs or taken on additional credit in anticipation of receiving blended finance.
Questions over capacity
Trollip also questioned whether Land Bank currently retained sufficient institutional capacity and agricultural expertise to perform its developmental role effectively. He claimed the bank had lost experienced personnel and criticised its management, staff capacity and agricultural expertise.
While these claims have not been independently verified by Farmer’s Weekly, the bank’s financial position has undergone significant strain in recent years.
Land Bank defaulted on its debt in April 2020 and reached an agreement with lenders in September 2024 as part of a process to stabilise its operations and restructure its debt. National Treasury reported that its debt declined from R40,6 billion in April 2020 to R10,8 billion by December 2024.
The bank’s 2024/25 annual report showed that non-performing loans declined in absolute terms from R9,2 billion to R8,4 billion, although the non-performing-loan ratio increased from 53,1% to 54% as the overall gross loan book contracted.
Trollip argued that the bank’s financial position inevitably affected the institution’s willingness and ability to finance higher-risk developmental projects. He further argued that the consequences fell disproportionately on developing farmers because established commercial producers were generally better positioned to obtain production finance from commercial banks.
More than 500 farmers supported
Land Bank has defended the BFS against suggestions that the programme is failing.
Since its launch in November 2022, approximately 610 blended-finance applications had been approved and 539 farmers funded, according to data previously provided.
Of the approved transactions, 179 involved women-owned enterprises and 107 youth-owned businesses, while 179 beneficiaries received assistance for land and farm acquisitions.
Land Bank said strong demand demonstrated both the historical under-representation of disadvantaged producers in commercial agriculture and the contribution the programme was making towards broader participation.
It nevertheless acknowledged that demand exceeded available grant funding, and said it was working with the Department of Agriculture and other stakeholders to find additional funding partnerships and strengthen blended-finance mechanisms.
