Drought, depressed commodity prices and a strong rand value have taken their toll on commercial and emerging farmers in South Africa, the Land Bank said on Sunday.
In the bank’s 2004/05 report published this week, chairperson Jethro Mbau said South Africa’s agricultural sector is going through ”difficult times”.
A net loss of R330-million during the past financial year was a ”disappointing performance” by the bank.
The Land Bank devotes its energies to agriculture and is mandated to prioritise empowerment of those previously deprived of the opportunity to contribute to the nation’s agricultural production, said chief executive Alan Mukoki.
He acknowledged challenges the bank faces in delivering on its mandate.
”The bank has accepted the responsibility of extending its facilities to the dispossessed and marginalised, while at the same time maintaining its own credit rating at an impeccable level,” he said.
Minister of Agriculture and Land Affairs Thoko Didiza commended the bank for its role in supporting black economic empowerment in the agricultural sector.
She pointed out that the bank concluded black economic empowerment deals to the value of almost R1-billion during the past financial year.
”Prominent among these were the R501-million Land Bank advanced to Afgri-Sizwe for the purchase of a 26,7% stake in Afgri Operations and the R485-million which Ushukela Milling used to buy a sugar mill in KwaZulu-Natal,” the minister said in the foreword of the report.
The bank’s development book showed a doubling in the number of loans provided to emerging farmers, from 61 000 in 2003/04 to almost 130 000 in 2004/05.
It also increased the value of step-up loans to emerging farmers from R69-million in 2003/04 to R96-million in 2004/05, and showed an overall portfolio growth — for retail, corporate finance, development and step-up loans — of 13%.
”The Minister of Finance [Trevor Manuel] has confirmed that government sees the bank as strategically important for the achievement of government’s socio-economic objectives,” said chairperson Mbau.
”For this reason, [he] has concurred with the undertaking by [Didiza] to support the bank to the maximum extent of R1,5-billion until December 31 2006, should the need arise,” he said. — Sapa