10 june 2003

The Land Bank’s Role in Agricultural Development From 1994 to Date

Presentation To The Portfolio Committee on Agriculture and Land Affairs

(National Assembly)

10 June 2003

Presentation Outline -

1. How Much Has Been Advanced for Agricultural Development from 1994 to Date?

2. What Activities Have Been Organized or Embarked Upon on Agricultural Development?

3. What Further Inputs / Programmes Will Your Institution Be Involved In?

4. Your Relationship With The Department of Agriculture and Land Affairs?

1. How much has been Advanced for Agricultural Development since 1994

1 (a) Amount Advanced to Agriculture

From 1994 to date RETAIL Commercial Development

R 19,407,167,070 R 1,087,604,000

WHOLESALE / CORPORATE

FINANCE UNIT R 55,196,071,659

DEVELOPMENT PROJECTS R 475,219,081

STEP UP LOAN (MICRO

LOANS TO RESOURCE POOR

INDIVIDUALS

R 345,267,974

TOTAL AMOUNT ADVANCED

R 76,511,368,060

LRAD AMOUNT DISBURSED

R 116,916,993

1. How much has been Advanced for Agricultural Development since 1994*

1 (b) Amount Advanced to Development Clients.

From 1994 to date RETAIL Development

R 1,087,604,000

DEVELOPMENT PROJECTS R 475,219,081

STEP UP LOAN (MICRO

LOANS TO RESOURCE POOR

INDIVIDUALS

R 345,267,974

LRAD AMOUNT DISBURSED

R 116,916,993

TOTAL AMOUNT ADVANCED

R 2,025,008,048

* Loans to Development Farmers recorded separately from the year 1998

2.What Activities Have Been Embarked Upon on Agricultural Development? (1)

NO PROGRAMMES REMARKS

1 LRAD (Land andRedistribution forAgriculturalDevelopment)

Amount Disbursed -R116,916,993

2 BIP’s (Bought inProperties)

72 farms to the value ofR54.3m (in extent of 40086ha) sold to blackcommercial farmers.

18 offers to the value ofR21.1m (in extent of 11308ha) received from blackcommercial farmers.

2.What Activities Have Been Embarked Upon on Agricultural Development? (1)


3 Developingproducts toencouragementorshipbetween establishedcommercial farmersand new entrants

Social Discount Productintroduced to incentiviseCommercial Farmers byproviding them a discountinterest rate.

We have 85 arrangements(Mentors) countrywide.

4 Engaging AgriSA inprojects for farmerdevelopment

This arrangement withAgriSA has benefited about832 beneficiaries.

5 Pilot "youth" farmerproject with NYC(National YouthCommission)

4 farms identified Kheis Farm - N Cape Glen Alric - W Cape Klippan - N West Damplaats - Free State

What Activities Have Been Embarked Upon on Agricultural Development?(2)


6 Step Up (MicroLoans) Loans torural resource poorindividual

Loans of R345,306,250approved to 126,365individuals

7 Established "mobilebanking" facilities ineach province.

Operational in 64 areasin all provinces.

8 Equitable interestrate model fordeveloping farmers

10% mortgage loan forDevelopment farmers.

Lowest interest in themarket

What Activities Have Been Embarked Upon on Agricultural Development?(2)


8 Sales Campaignsaimed at reachingemerging farmers

1909 group presentations to59078 prospective clients.

100 congresses with 11485people completing visitor'sbook.

160 shows with 91709people visiting our stand.

19165 client visits9 Support to the Land

RestitutionProgramme

Signed MOU withCommission & NDA.

Financial assistance towardscelebration

Appropriate financialservices of R784 000advanced to 155beneficiaries.

Participated handoverceremonies

What Activities Have Been Embarked Upon on Agricultural Development? (3)


11 Concluded agencyagreements withprovincial DFI /Village Banks /Intermediaries

Approved a loan of R10mto Uvimba intermediary.

Approved a loan of R40mfor Ithala.

Signed MOU with IDT –R3.8m received from IDTfor guarantee loans forCommunity ProductionCentre.

Signed MOU with PostBank – to use theirinfrastructure for our stepup loans and flood relieffacility.

Discussions in progresswith WomenDevelopment Bank andthe Village Bank.



12 Sourcedevelopment grantfunding frominternationalinstitutions inconjunction withNDA.

DGVR – Land Bank toparticipate in bilateralCo-operatives supportproject.

Draft agreement tosource EU / IDC Riskfacility fund of R50m.

13 Support NAFU /NERPO and otheremerging farmerorganisations tobuild own capacity.

MOU signed with bothNAFU and NERPO – witha total financial support ofR885k given for the Jan2002 to March 2003.

Bank represented atNERPO YoungAgribusinessEntrepreneurialDevelopment Association.



12 SABC RadioStations – Educationcampaign

Education campaignin the followingtopics:- About Land Bank- Partnerships- Step Up (Micro

Finance Product)- Flood Relief



14 Flood Relief. R45m set-aside for flood relief. Flood relief loans to be given

to affected emerging andcommercial farmers.

Project Managed the R161.5mNDA scheme for flood relief.

Fixed rate of 10%.15 Building Stakeholder

Relationships See Annexure 1

16 Major DevelopmentProjects Funded

See annexure 2

17 Public - PrivatePartnerships

See annexure 3

Access to Skills and Capacity BuildingAccess to Information, TechnologyAccess to MarketsAccess to Land

Debt: Arrears and Repayment• Unable but willing• Able but not willing

Challenges for Agricultural Development Finance

Stakeholder Relations - Annexure 1 (1)

Agency agreements with provincial DFI / Village Banks / Intermediaries - Wholesale facility of R10m granted to Ithala and of R40m to Uvimba

National and Provincial Youth Commission - 4 farms made available to the youth.

Umsobomvu Trust - Provide production credit finance as well as training capacity building on the Youth Farms.

MoU signed with both NAFU & NERPO - R885k provide for capacity building, conferences and international relations. Also represented at Nerpo Young Agribusiness Entrepreneurial Development.


Onderstepoort Biological Product (OBP) - OBP busy with a proposal where Land Bank is to provide finance to the distributors of Animal medicines and Livestock feeds.

ARC - Initiatives which develop models for livestock improvement & risk management on grazing and crop production and the Geographical Information System.

Farmers of the Year - Sponsored the Provincial Female Farmer of the Year, National Female Farmer of the Year and the Grain SA Development Farmer of the Year.


IDC - Co-financing & risk sharing on selected projects e.g Bethlehem Small Farmers (Apples project) & Sundays River (Citrus project).

Agri SA - Mentorship programs which benefited 832 beneficiaries.

ABC - Relationship which promote discussion on issues pertaining to the Land Bank Act and its impact to the Agribusiness. Firm commitment by ABC to support agricultural development in the form of linking development farmers to market opportunities.

Major Development Projects Funded - Annexure 2 (1)

PROJECT AREA ACTIVITY BENEFICIARIES VALUE

NkomaziIrrigationExpansionProgramme

Mpumalanga Sugar CaneProject

311 Beneficiaries R140m

Kanhym Estate Mpumalanga Major Farmingand AgribusinessVenture

500 workers fundedto acquire 18% stake

R132.5m

Kayangwenya Mpumalanga Sugar Cane 21 Beneficiaries R3m

Goodhouse Northern Cape Irrigation Projectfor PaprikaExport


SA Eals Western Cape Aquaculture Community basedorganisation

R19.45m

Major Development Projects Funded - Annexure 2 (2)

PROJECT AREA ACTIVITY BENEFICIARIES VALUE

Ennerdale Dairy Project Gauteng Dairy 45 Beneficiaries R8m

GDP Transport KZN Sugar CaneTransport


Makhathini KZN CottonProducingProject


Nondabuya – Makhathini KZN IrrigationCash Crop


Bee Foundation Nationwide

Beehive 2500 Beneficiaries R16m

Mabandla, Zigidi &Zintwala CommunityForestry Projects

EasternCape

ForestryProject

3800 Families R15.15m

Public Private Sector Partnerships (1) - Annexure 3

Nkomazi Project Land Bank - Finance (R93m)DLA - Grants (R47m)TSB - Sugar QuotaEskom - Power DWAF - Water Grants

Goodhouse (Paprika)Land Bank – Finance (R55,4m)Variety Holdings Contracts DLA - Grants (R13m)Regional Council - Long Term Leases

Top RoseLand Bank – Finance (R4,6m)Netherlands Investment (R5m)IDC (R4,6m)Equity Africa (2,5m)

Hydro TechLand Bank – Finance (R6m)Private Investors (R6m)

Public Private Sector Partnerships (2)

Mabandla & Sigidi & Zintwala Forestry ProjectLand Bank – Finance (R15,5m)State Land Private sector (Mondi) Management

Makatini CottonLand Bank – Finance (R55m)Private Investment – NSK (R20m)

Papricor OilsLand Bank – Finance (R8m)Pamodsi & Andre Hendricks (Private investment) - (R20m)

Kanhym EstatesLand Bank – Finance (R96.8m)LRAD Grant Approved (R24m)Private Sector Investment (Management & members) - (R11,7m)

Various Capacity Building Programmes with Individual Commercial & Development Farmers

3. What Further Inputs / Programmes Will Land Bank Be Involved in Future? (1)

A. COMMUNICATION STRATEGY - Land Bank communication strategy

- Improved internal communication

- Improved external communication

B. FOOD SECURITY STARTER PACK - Food Security initiative

-

- Concluding MOU implementation with NDA


C. ENHANCED BUSINESS PROCESSES AND SYSTEMS

- Help to streamline our internal processes.

- Identify bottlenecks within our internal systems.

- Help to speed up our loan processing, thus improving our turnaround

time.

D. DIPUDI GOAT PROJECT - Analysis of Goat Industry into financing opportunities

- Meat, Skin, Milk and Cheese analysis.

- Busy with a proposal and a financial package.


E. ARC JOINT INITIATIVES - Livestock Improvement & Innovation Analysis

- Risk Management - Impact of climate condition on grazing & crop production.

- Developing early warning climate conditions.

F. NEW BANKING SYSTEM - Assist with improved customer service

- Enable us to operate on-line.

- Improve processing of documents.


G. National Agricultural Risk Management Initiative - Partnering and Supporting the NDA initiaive

H. Proposed Agency agreement for the implementation of Agricultural Debt Management Act

4. Relationship With The Departments of Agriculture and Land Affairs

Accountable to the National Department of Agriculture. NDA a key partner for agricultural development Joint monitoring of project - Provincial Advisory Forum. Land Restitution Project - Land Bank provide technical advise and finance. Flood Relief - Project Manage the NDA R161.5m scheme. Agent for the DLA for LRAD distribution Joint initiatives with NDA in sourcing international grant funds - DGRV

(German Based Institution) Joint initiatives with NDA in the Kgalagadi Dipudi Projects Participate in ITCA and Minmec

.

Thank You

10 june 2003

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