The Democratic Alliance (DA) calls on the Department of Agriculture, Land Reform and Rural Development to expand its Covid-19 relief efforts to include measures to support medium-scale farmers with a turnover of up to R100 million per year. Currently, the agriculture disaster fund only makes provision for farmers who earn less than R1 million per annum.
Agricultural input costs are very high, and the majority of small and medium-scale farmers will, therefore, have a turnover of more than R1 million per year.
The disaster fund for agriculture, as announced by the Minister of Agriculture, Land Reform and Rural Development, Thoko Didiza, clearly seeks only to support subsistence and small-scale farmers with an annual turnover of between R20 000 and R1 million. This means that medium-scale farmers have been excluded from this much-needed funding despite the devastating impact of the recent drought and the current lockdown regulations on their finances.
The DA has received worrying reports from some farmers lacking funding to safeguard the health of their workers adequately. They are struggling to buy the necessary hand sanitisers and masks, and transport for workers are a serious concern. The additional cost of transporting workers and goods in a safe way that complies with lockdown regulations have become too much for some farmers to bear.
Their lockdown worries are further compounded by the combined agricultural debt, which amounts to R126 billion. Farmers need urgently financial relief to consolidate their current debt. The added cost of health and safety requirements on input and production will only add to the burden of many farmers.
In addition to the expansion of agricultural relief to medium scale farmers, we are also proposing the following measures:
- In order to ensure proper oversight and transparency, the fund should be administered by the Land Bank. It already has extensive measures in place to monitor and vet to ensure that the projects meet business, agriculture and financial criteria. The bank has agricultural economists that annually review and report on successes and failures of projects and can use those expertise to closely monitor fund expenditure.
- The department must ensure that every cent being spend can be accounted for and reaches the farmers in need. Too often have relief efforts benefited only the middlemen who hike prices, and have farmers been left without the necessary guidance and support. Most recently in KwaZulu-Natal, the department used recapitalisation support to dump tractors and seeds on farmers without following agricultural recommendations.
- We also propose that the banks look at bridging finance packages to ensure that current agricultural debt is consolidated to ease cashflow problems. The government should also seriously consider subsidised relief funds for the farmers providing 80% of the food supply in South Africa.
While it may seem like business as usual for this sector, the pandemic has a serious impact on operations for farmers of all scales, especially small and medium-scale farmers. It is therefore critical that these farmers receive adequate financial support to ensure the safety of farm workers and to keep producing healthy and affordable food during this time. All effort must be made to keep this sector functioning.