Hollard Insure and Farmingportal.co.za and Agri News Net - Young Agri Writers awards
South African agriculture does not lack potential — it lacks the right kind of funding.
For too long, smallholder and emerging commercial farmers have been squeezed into banking models designed for retail clients: high-interest debt, rigid repayment schedules, and collateral demand they cannot meet. The result is a system that fails both the farmer and the financier. If agriculture is truly the backbone of food security, rural industrialization, and national pride, then why do we continue to treat it as a credit risk instead of a nation-building asset?
Having worked with developmental farmers for some time, I am often asked: what are the real challenges or gaps in terms of accelerating smallholder farmers to sustainable commercial farmers, and how do we overcome these? The root challenge is not just technical — it is layered. Getting small-scale, smallholder or semi-commercial farmers to a point where they are considered “bankable” is a challenge and remains a stumbling block. Yes, not all farmers aspire to reach that point. For some, grant funding is seen as the end goal rather than a steppingstone. This dependency creates the vulnerability of running an unsuccessful business.
What Should Be Done
If we are serious about changing this trajectory, then several shifts are required. First, we must change the way of thinking. Farmers need to adopt a mindset and way of thinking that moves away from dependency on grants and donations. Sustainability cannot be built on handouts. If your business only survives on external support, then your model is not working — at least not for long-term profitability.
Second, we must shift toward credit solutions that accelerate enterprise development. This does not mean pushing farmers into debt traps; it means designing instruments that genuinely match agricultural realities. Farmers need programs that prepare them for loan repayments, not just for planting seasons. Repayment terms should match harvest cycles and cashflows, not monthly schedules borrowed from urban retail banking.
Third, we must design fit-for-purpose funding models. Blended finance — where grants, low-interest loans, and private investment intersect — provides a practical solution. Concessionary loans and revolving credit lines reduce risk while maintaining accountability. Co-investment schemes, where sponsors match farmer contributions, we can also shift investment from production input focused on machinery and mechanization, unlocking productivity gains that endure beyond a single season.
Leading Agents and Approaches
Some organizations have already started paving the way. The green bank - Nedbank, for example, through its Social Impact Unit has come forward in piloting financing approaches that align with both development objectives and commercial discipline. Community foundations, too, have shown the power of localized financing models that combine accountability with accessibility.
More recently, I was introduced to the Asset-Based Community Development (ABCD) approach — something I realized I had unknowingly been practicing all along. The principle is simple yet profound: the approach motivates parties to start from within and work inside - out. Use what you have first, build from existing assets, and only then seek external investment. This inside-out approach challenges the belief and assumption that external investments are always the answer. Is it safe to say, “External investments from abroad can be the slowest route to true sustainability?”
Mindset, Ownership, and Generational Thinking
Being a farmer is not just about production; it also is about your mindset and way of thinking. Farming requires long-term strategies, often spanning to future generations. Experience, coupled with education, has always been the foundation of lasting success. In Europe, agriculture is associated with prosperity, pride, and tradition. In fact, in Germany, no other sector has a higher proportion of university graduates than agriculture. Compare this with Africa, where farming is too often associated with poverty and lack of education, and the contrast is severe.
Without ownership of land, without pride in farming as a profession, and without long-term strategy, it is difficult to build resilience. Farmers cannot be expected to think generationally if the system only equips them to survive season by season.
Working Towards a New Funding Future
The bottom line is this: South African agriculture does not lack potential. What it lacks is the right kind of funding. The current system mirrors commercial banking — and it is broken. It fails the farmer by making credit inaccessible, and it fails the funder by heightening risk and default rates.
The solution lies in creating fit-for-purpose Agri-finance models that:
- Blend grants, low-interest loans, and revolving credit lines.
- Share risk between funders, off-takers, and farmers.
- Tie repayment terms to harvest cycles.
- Integrate technical assistance and post-investment support.
- Leverage group guarantees co-operative structures to de-risk access.
These models exist. They work. But they are not scaled.
If we are truly committed to food security, farmer resilience, and rural industrialization, then we must begin to fund agriculture as a nation-building asset — not as a retail credit risk.
Banelise is an Agricultural Economist and Development Practitioner with a strong passion for farmer development, agricultural transformation, and community-led growth. Her professional experience spans agricultural development programmes, smallholder farmer support initiatives, and community projects.With an academic background in agricultural economics, Banelise combines technical expertise with a deep understanding of community dynamics, making her work at the intersection of agriculture, development, and social impact highly effective.
