Access to finance, sound financial management and partnerships with established producers are what turn small farmers into sustainable commercial businesses, speakers said at a panel hosted by the bank FNB at the Royal Show in KwaZulu-Natal on 8 October, under the theme 'Farming together'.
Sandy La Marque, chief executive of the KwaZulu-Natal Agricultural Union (Kwanalu), said its development programmes had trained 7,607 people, placed 750 in farm jobs and supported 6,480 businesses over nearly a decade, with 20,190 jobs created and more than R1 billion reported to have reached the rural economy. In a follow-up of 45 trained entrepreneurs, financial literacy rose from 25 percent to 58 percent and those regularly preparing budgets from 67 percent to 96 percent.
Janice Robson, FNB's head of SME business development, said banks look beyond production volumes at financial records, cash-flow projections, market access and an understanding of risk. "Success is increasingly determined by who can manage margins and cash flow," she said, urging farmers to keep personal and business money apart. Bertram July of FNB told farmers to talk to a bank before they need finance, even if they do not fit every lending rule.
Livestock farmer Shakes Shabalala, from Dundee, began expanding on leased land after leaving the South African Defence Force in 2017. His records were not up to date, so the bank turned him down; instead he agreed a weaner supply deal with a commercial farmer and paid for a farm of his own through weaner deliveries until he owned it. He has since added goats and sheep, and his family keeps poultry and grows vegetables.
Sandy Gumede, co-founder of Zulu Girl Wines, warned that sales are not the same as cash: "You can have 200 likes on social media; it doesn't mean cash in the bank." Her self-funded business got stock and a foothold in the market with the backing of an established producer.
The report was written by Henning Naude for Farmer's Weekly.
Source: Farmers Weekly South Africa
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