Opening the doors to finance for SA farmers
Farmer's Weekly|August 23, 2024
Agriculture is a crucial pillar of South Africa's economy, providing livelihoods for millions and contributing significantly to the nation's GDP. However, farmers face numerous challenges, including securing adequate financing to sustain and grow their operations. Cobus du Plessis looks at some of the key features and pros and cons of the financial opportunities available to producers.
Cobus du Plessis
Opening the doors to finance for SA farmers

Access to adequate financing is essential for the success and growth of agricultural ventures in South Africa. Farmers need capital for equipment, seed, fertiliser and other inputs essential for production.

Additionally, financing is necessary for marketing their produce, which is a critical step before any revenue is earned.

Navigating the complexities of securing agricultural financing can be daunting, but understanding the available options can significantly enhance a farmer’s ability to succeed.

COMMERCIAL BANKS

Commercial banks in South Africa offer specialised agricultural finance products tailored to the needs of farmers and agribusinesses. These products include term loans, revolving credit, and equipment financing. Farmers should approach banks with experience in agricultural lending and enquire about their loan options, interest rates, and eligibility criteria.

The advantages of approaching a commercial bank for finance are the wide range of financial products offered, the extensive resources that established financial institutions have, and the potential for bigger loans.

The disadvantages, however, are that they have stringent eligibility criteria and higher interest rates compared with other sources.

CO-OPERATIVES AND CREDIT UNIONS

Agricultural co-ops and credit unions provide collective financing opportunities and favourable lending terms.

These organisations offer member-exclusive loan programmes and financial services tailored to the agriculture sector. The pros of co-ops and credit unions is that they are member-oriented and potentially offer lower interest rates. They also have financial products tailored to agricultural needs.

The cons are that they are members-only organisations, and they offer smaller loans compared with commercial banks.

MICROFINANCE INSTITUTIONS

This story is from the {{IssueName}} edition of {{MagazineName}}.

Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.

This story is from the {{IssueName}} edition of {{MagazineName}}.

Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.

MORE STORIES FROM FARMER'S WEEKLYView all
ARC names best dairy producers of the year
Farmer's Weekly

ARC names best dairy producers of the year

The Agricultural Research Council (ARC) recently announced the winners of the 2024 National Master Dairyman Awards at an event hosted by AgriExpo in Stellenbosch, Western Cape.

time-read
1 min  |
December 06, 2024
Lion breeders to give up bone stockpiles?
Farmer's Weekly

Lion breeders to give up bone stockpiles?

The Ministry of Forestry, Fisheries and the Environment issued an official notice in mid-November in which it called on lion breeders to voluntarily hand over their lion bone stockpiles to the state as soon as possible.

time-read
1 min  |
December 06, 2024
Thousands of British farmers march on parliament against inheritance tax
Farmer's Weekly

Thousands of British farmers march on parliament against inheritance tax

Thousands of UK farmers gathered in London, England, on 19 November to demand the government repeal a proposed inheritance tax on agricultural land, which they argued threatened the future of family-run farms (see page 4), Al Jazeera reported.

time-read
1 min  |
December 06, 2024
Avocado frittata with sundried tomatoes, feta and olives
Farmer's Weekly

Avocado frittata with sundried tomatoes, feta and olives

This wholesome, vibrant frittata is perfect for brunch or a light supper. Recipe and photo: The South African Avocado Growers' Association.

time-read
1 min  |
December 06, 2024
Feed, hay, and other costs are up, so it's time to get creative
Farmer's Weekly

Feed, hay, and other costs are up, so it's time to get creative

Breeders and riding schools need to explore innovative ways to generate income in order to ensure their survival, says Dr Mac.

time-read
2 mins  |
December 06, 2024
How to make polystyrene seedling trays last longer
Farmer's Weekly

How to make polystyrene seedling trays last longer

While thinking about how to prolong the lifespan of polystyrene seedling trays that are exposed to harsh sunlight, Bill Kerr began to wonder if a coat of paint might offer a solution.

time-read
2 mins  |
December 06, 2024
Living the 'culture' in agriculture
Farmer's Weekly

Living the 'culture' in agriculture

Creation Wines has won numerous awards, was ranked fourth in the World’s Best Vineyards in 2023, and more recently won the V d’Or award for the Best Brand Experience. The owners, Carolyn and Jean-Claude Martin, spoke to Glenneis Kriel about how their winery became a top tourism destination.

time-read
10+ mins  |
December 06, 2024
Time to take a deep breath on the slopes of the Magaliesberg
Farmer's Weekly

Time to take a deep breath on the slopes of the Magaliesberg

Around 100km from both Johannesburg and Pretoria in Gauteng and a tad over 40km from Rustenburg in North West, Farmer’s Weekly found a fine retreat on a working farm where couples may kindle their romance.

time-read
5 mins  |
December 06, 2024
African penguins could be extinct by 2035 how to save them
Farmer's Weekly

African penguins could be extinct by 2035 how to save them

Protecting the critically endangered African penguin is good for the environment, other animal species, and the economy, say Lorien Pichegru and Dr Alistair McInnes of Nelson Mandela University, Katrin Ludynia of the University of Cape Town, and Peter Barham of the University of Bristol in the UK.

time-read
4 mins  |
December 06, 2024
An urgent need to confront Nassella in SA
Farmer's Weekly

An urgent need to confront Nassella in SA

South American grass species from the genus Nassella were unwittingly introduced to South Africa over 120 years ago and continue to invade montane veld. As Mike Burgess writes, research-based action is required.

time-read
3 mins  |
December 06, 2024