Special loans for farmers

2012-10-16 00:00

THERE were mixed reactions in the farming community regarding the special interest rate on loans to emerging farmers that was announced by Agriculture, Forestry and Fisheries Minister Tina Joematt-Pettersson.

The minister announced that the Land Bank will give a special interest rate of prime minus five percent, instead of prime plus five percent, to emerging farmers, Business Day reported yesterday.

President of National African Farmers Unions Dr Mandla Buthelezi said the special rate would have no impact on emerging farmers, and it would be “pouring water on the duck’s back”.

“What is the point in giving someone a discount on interest on loans when that person is either blacklisted or is battling to settle other debts due to lack of productivity?

“What we are saying is that the government should help the emerging farmers with grants and help those people progress and gain access to the markets.”

He said any loans given to emerging farmers will disappear without yielding profit and that person will have to pay it back, and that will leave farmers in a worse off position than they were.

There is confusion about the implementation of the rate cut. Johan Pienaar, deputy executive director of Agri SA, said they understood it to be a special deal for emerging farmers, which would not be implemented across the board.

“This is to encourage emerging farmers to enter the market as it’s quite a challenge … without resources,” he said.

The minister’s spokesperson, Palesa Mokomele, said the rebate would be applied to smallholders and commercial farmers alike.

Pienaar said if the rate cut was implemented correctly it could help alleviate the burden of interest on emerging farmers. “We have been advocating for this, and we would have welcomed it being implemented across the board, but we are realistic that it will not be affordable for the Land Bank.”

The announcement is in line with a call by Finance Minister Pravin Gordhan in August that the Land Bank is to find ways to reduce the cost of lending money to farmers and to help rein in the failure rate of farms.

Join the conversation!

24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions.

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Comments have been closed for this article.

Inside News24

 
/News
Traffic Alerts
There are new stories on the homepage. Click here to see them.
 
English
Afrikaans
isiZulu

Hello 

Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.


Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Settings

Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.




Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.