Market access a stumbling block for emerging farmers

Helping emerging farmers to reach commercial status was one of the goals of the land reform process

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 – but a lack of market access and capital were hampering the process, delegates were told at the Farmer Settlement and Agricultural Sustainability Indaba recently held in Durban. “We are trying to get people to move away from being workers to becoming business people, who want to make a living out of agriculture,” said Agribusiness Development Agency (ADA) chief operations officer Dr Thulasizwe Mkhabela.

“But one of the issues is that emerging farmers find it difficult to participate in the value chain. “Development is taking place in isolation. A chicken farmer needs to have a market for his chicken before he even starts to produce chickens.”

Lack of information
Sharon Reed, CEO of Neosho 119, and founder of the Vuka Mentorship Programme, said there was a gap between what the market wanted and what emerging farmers were giving them. “We want emerging farmers to understand how to set up their businesses from a market point of view rather than a product point of view,” she said. Reed has started making contact with businesses in South Africa to organise networking sessions where businesses can explain their criteria to farmers.
She said 2013 should be “a year of information sharing”.

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Traditional leaders
Ngqabutho Bhebhe, CEO of the Ingonyama Trust Board (ITB), which has 2,79 million hectares of land in KwaZulu-Natal, said traditional leaders had a role to play in developing projects that were sustainable. Before agricultural projects were put in place, proper studies should be conducted to find out if the projects were suitable and to assist communities with them, he said.
“We need a cohesive approach,” he added.

Access to capital
Dr Moraka Makhura, Land Bank’s head of economic research, said KZN was making progress with land reform, particularly in industries such as sugar cane and grain. “It’s a myth that emerging farmers don’t know how to farm. Most are good technically and are willing to work. They need support in terms of business skills, subsidies and information,” he said. “Access to capital is another major issue. New banking regulations are coming in and alternative sources of capital, such as state-owned funding facilities, might become critical.”

Ithala agribusiness manager Dr Sibusiso Dludla said a huge number of beneficiaries were seeking financial assistance, and lack training in financial management and have poorly thought out business plans. “They utilise working capital recklessly and ignore debt liability. Without an own contribution from the client or grant, a business is likely to go under. Even after a financial injection, most businesses do not recover,” said Dludla.