Farming is a particularly risky kind of business and for most farmers, finance remains one of the biggest obstacles standing in the way of their progress. Luckily, South Africa have a variety of funding options for farmers, ranging from grants to government funding and private investors or commercial banks.
Agriculture is one of the most important sectors n the country, which is why government offers quite a few options for agriculture farming like:
1. Land redistribution for agricultural development (LRAD) – Through this program, previously disadvantaged citizens can apply for land for the purpose of agriculture, as long as they are able to make a minimum contribution of R5000 in either cash or labor.
2. AgriBEE Fund – This fund was created to provide previously excluded black business owners with support for their agribusinesses. There is quite an extensive list of criteria for funding from this entity, including submission of a thorough business plan, a clean credit record, and skills specific to the type of business applied for.
3. The Alliance for a Green Revolution (AGRA) – They offers funding for more than just farming operations. They also make grants available for agridealers, agricultural research organizations, farmer organizations and agriculture non – profits.
4. Landbank – They designed a Credit line called “Financing for Farming and Agric – Enterprises” in order to assist South African farmers in their financial needs. With this type of loan you can buy a farm or machinery that you will need to make it operational.
5. Commercial Banks – Most Commercial Banks grant credit to farmers for specific purposes, especially those who can generate income but you will need to provide them with a proper farming business plan showing the viability of the farming operation.
The above are only a few funding options available to farmers. Most institutions will require a well – developed farming business plan supported by financial projections/statements showing how you will make money and more important how you going to repay your loan.