It was crucial that a feasible financing model be found to help new farmers, said Prof Nick Vink, chair of the Department of Agricultural Economics at the University of Stellenbosch, at Agri Northern Cape’s recent congress in Kimberley.
“It is extremely difficult to enter primary agriculture and with the way that financing currently works any new entrant is likely to fall in a liquidity trap,” said Vink.
In the 1980s, Land Bank’s loan term stretched up to 40 years. These days farmers were lucky to secure a 15-year loan, said Vink. But, due to the nature of agriculture this strategy simply did not work.
‘Post settlement support’ has become a government buzzword, but Vink said this shouldn’t be government’s main priority: “Officials need to understand that a farmer is an entrepreneur. For an entrepreneur it is crucial that there should be systems in place to help them.”
Instead of throwing money at the problem, help could rather be given in the form of support services, added Vink.
Government’s involvement in agriculture had reached a point where their biggest focus was on land and labour. In these matters the authorities aren’t enabling entrepreneurs, but rather hampering them, said Vink
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