• AGRI SA lobby wants state guarantees or funds from Land Bank
  • ‘To date, we haven’t received a cent from government,’ it says

The biggest lobby group for South Africa’s agriculture industry asked the government for emergency aid for farmers enduring the worst drought in more than a century.

“It’s a shame that the commercial and emerging farming sectors have not received any assistance from government,” AGRI SA said in an e-mailed statement Tuesday. “To date, we have not received a cent from government.” The organization wants help for its members in the form of either state guarantees or direct assistance to farmers through the structures of the Land Bank, agribusinesses or special-purpose vehicles.

Rainfall in 2015 was the lowest since records began in 1904, causing widespread damage to crops and livestock, with rural communities particularly affected. Farmers will need as much as 16.6 billion rand ($1.2 billion) in the year through March to subsidize feed purchases, cover grants and interest-rate subsidies for growers in financial distress and pay workers, a study earlier this year by AGRI SA and others showed.

While AGRI SA has set up a fund to support farmers, this is “a drop in the ocean” compared with what’s required. The organization is considering a longer-term facility to be tapped at times of disaster. “AGRI SA cannot do it alone and will require financial muscle from Treasury or other state entities, the private sector and any other contributors,” it said.

State Guarantees

The National Treasury approved last week a request from the state-owned airline for a guarantee the unprofitable company needs to finalize its annual financial statements. The government also extended a 1.85 billion-rand debt guarantee to state arms manufacturer Denel SOC Ltd. on condition it reduces borrowings by 2020, Business Day newspaper reported Monday.

The government has spent 268 million rand on drought relief from its Comprehensive Agricultural Support program, Cooperative Governance and Traditional Affairs Minister Des van Rooyen said last week. Provinces have provided 173 million rand to farmers to buy animal feed and stock and an additional 198 million rand in the 12 months ending in March to help owners of small land holdings secure livestock feed and water.

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