USAID, South African bank partner to help emerging farmers go commercial

South Africa's agriculture sector has been given a boost with the signing of a deal worth R300 million ($44 million) between the US Agency for International Development, and a major banking group. The deal targets emerging black farmers wanting to break into the market, leading to the expanding and strengthening of the agricultural markets.

But unions have expressed concern, saying they are not aware of the deal. They are afraid this will be another BEE (black economic empowerment) deal, only benefiting an elite few. Outreach programmes will help identify benefactors.

Sizwe Nxasana, from the First Rand Banking Group, says: "We are going throughout the country to network and publicise this deal, to get people on board."

South Africa has a dual agricultural economy with both well-developed commercial farming and more subsistence-based production in the deep rural areas. Covering 1.2 million square kilometres of land, it has seven climatic regions, from Mediterranean to subtropical to semi-desert. While 13% of South Africa's land can be used for crop production, only 22% of this is high-potential arable land. The most important limiting factor is water availability. The country is not only self-sufficient in virtually all major agricultural products, but is also a net food exporter.

Since 1994 the government has been working to develop small-scale farming to boost job creation. The American agreement is targeted at augmenting the South African market and does not necessarily mean that farmers will compete internationally.

The new USAID mission director to South Africa, Carleene Dei, says: "We want to plug into the national and regional market, we not talking about exporting to the US, that would be too expensive. We aiming at grassroots."

SABC