Blended financing may do the job

The new year is in full swing and, like every year, soon everyone will not believe how fast time is flying. What an exceptional year we are experiencing! I am so grateful and happy together with each producer for the widespread rain we have received all over the country. However, in the same breath my heart goes out to each one.

I cannot imagine how difficult it must be – especially psychologically and spiritually – to suffer so much damage under the circumstances that some producers had to endure over the past three months. It started with the difficult, wet harvest time in the Western Cape together with the load shedding that made things worse. Producers in the Free State who could not even harvest their (fantastic) wheat crops, young seedlings drowning and even producers who could not plant significant portions on time. Despite this I know everyone is grateful – grateful for the mercy waters.

As we hope that the end of the COVID pandemic is in sight, we are shifting our focus to the next matters. We know that we will most likely experience more COVID variants that we’ll have to mitigate, but for me there are two other issues that are threatening especially the cultivation of grain.

Firstly – and definitely the biggest threat in the short term – is the absurd rise in input costs, especially of fertiliser which is a grain producer’s single largest variable cost and which makes grain production possible. I see this as a short-term threat, since we believe the international drivers will turn around, but there are certainly unique local factors that we need to address at the same time.

Secondly, we all know that the uncertainty regarding property rights is the biggest challenge that is threatening our country’s growth and advancement over the longer term, limiting it altogether. Yes, there are other things too, but personally I regard this as the most important obstacle. Politicians benefit from the rhetoric surrounding it – the onslaught against and the pressure to amend the Constitution, will most likely continue and increase in the coming year and in the run-up to the 2024 election.

Furthermore, we also know the latest political tactics are to blame the Constitution for shortcomings in service delivery in order to hide corruption. After a quarter of a century, everyone should clearly see that only those who are politically connected are benefitting from it, and this at the expense of the majority who remains poor. That is why we must and will continue to fight and debate it – even to the highest level. On top of that, we know the consequences of continuing to do the same things and expecting a different outcome!

Is the right and – most probably – the wisest thing we can do not to help establish and support more new, sustainable commercial (grain) farmers? The reason for this is that a larger part of the national crop is produced from these ranks. There is enough evidence that the land itself is not really the issue and we all know that there is enough land on the market. If we actually start thinking differently and take on the challenge as an opportunity, we can improve matters for ourselves, our children, our country and thus for everyone in the longer term.

So, when we look at the latest blended finance scheme (BFS) and the intense focus on it in the Agriculture and Agri-processing Master Plan (better known as AAMP) as ‘main source’ of development financing, we see the BFS as a new opportunity and potential solution for land reform projects. There are most definitely ways to turn it into opportunities. We need every entrepreneur’s brain power to help with this, since it is not a one-size-fits-all approach. We just have to keep on doing the right things, because we know it is the right thing to do!

All the best for the rest of the season: In the midst of the noise, let us concentrate and focus on the things within our power to change and improve. Enjoy it, it remains a privilege!

I would like to hear from you: Write to me, contact me, make an appointment or invite me to visit you (pieter@grainsa.co.za).