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March : New Agriculture Development Agency Aims For R25bn In Investment

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24 March, 2020

New Agriculture Development Agency Aims For R25bn In Investment

New Agriculture Development Agency Aims For R25bn In Investment

The South African Agricultural Development Agency was officially launched in Pretoria on Tuesday, and hopes to facilitate investments of R25 billion in the agricultural sector over the next ten years.

AGDA is the culmination of an initiative which began about two years ago as an initial response to President Cyril Ramaphosa's call to the private sector to help create jobs, acting CEO Leona Archary told Fin24 on Wednesday.

Archary has extensive experience in working in government in the agricultural and rural development areas.

The AGDA initiative falls under a public private growth initiative led by former minister Roelf Meyer and Johann Van Zyl from Toyota SA. Yet, says Archary, in itself, AGDA is not a traditional public-private partnership (PPP), but rather a response by the private sector to support government in developing the agricultural sector.

Network of support

The focus will be, in particular, on developing black farmers - including smallholder and newly commercialising farmers. The agency also intends to support government to ensure sustainability of the land reform programme by providing a network of support,  essentially helping to alleviate some of the pressure on government in the process.

"This is a private sector led initiative, but government supports it. There will not necessarily be money flowing between government and the agency, but we can work together on identified projects," she explained.

The idea is that AGDA will bring together all role players, including the banking sector, big commercial farmers, co-ops and unions, among others, who want to help with transformation. At the same time, government's role would be to make sure policy and regulatory blockages are removed.

"AGDA is a not for profit agency able to provide the necessary technical skills too via our partners. The agency will be able to fill gaps which currently hamper black smallholder farmers to access finance as well as obtain holistic support," said Archary.

"The response to our launch has been excellent. We will raise funding from our members and other sources."

In her view, it is the structure of AGDA that is attractive to those in the industry.

"Of course, we cannot do everything all at once. We will start with pilot projects on unproductive land currently held by the state and even unproductive mining land. We will also support government with development on land acquired through restitution and redistribution," said Archary.

"We can also look at communities situated around commercial farms and develop an aggregator model with the commercial farm as the anchor. The focus is on development of commodity value chains - linking small farmers and commercial ones. The idea is to consolidate activities."

Sustainable impact

Scale is not the only objective, but also the ability to ensure capital investment for sustainable impact.

"People are saying they want to put their money into something trustworthy with good governance. This is a collaborative effort to provide access to a range of agricultural support," she said.

"We have not yet agreed on which part of SA we will initially focus on, but we will send out a call for projects to be submitted to be used as initial pilot projects."

She said the impact of the work AGDA does will continuously be evaluated and monitored.

"I have been in this sector for many years and I see a lot of enthusiasm for the AGDA initiative. People are looking forward to seeing what it will be able to do," she said.

Source: Transport & Construction