Collaboration is key to transformation and inclusive development in the agricultural sector. For this to happen, corporates and non-profit organisations (NPOs) need to ensure their interests are aligned and that interventions are accessible to target groups. This was the focus of a conversation at the Trialogue Business in Society Conference. Panelists included Loffie Brandt, Head of Sales Enablement: Agri Business at Absa bank, and Noel Bastiaan, founder of ForFarmers Group.
Using the partnership between Absa Bank ForFarmers Group as a case study, panelists explored some of the challenges facing emerging farmers, along with opportunities in the agricultural sector, highlighting the role partnerships between corporates and NPOs can play in the growth of the sector.
Supporting black-owned commercial farming enterprises
ForFarmers Group (FFG) is an agri-services company which believes it has a role to play in the transformation of South Africa’s agricultural sector. Its business model is unique in that it combines hands on techniques and proven farming principles with sound business and financial advice to support a new generation of farmers. The goal of FFG is not to be the biggest but the most efficient and effective in supporting the development of South Africa’s agricultural sector.
FFG works with more than 200 farmers who are organised in regional production hubs in KwaZulu-Natal, Mpumalanga, the Western Cape and the North West. Collectively, they have access to over 30 thousand hectares of arable land. Through this model, farmers benefit from economies of scale and access the best deals on agricultural inputs such as seed, fertiliser and crop protection.
FFG also facilitates access to markets and supports farmers in developing pricing strategies. “Our vision is to become a successful agribusiness, supporting commercial farming enterprises, owned by black farmers,’’ explained Bastiaan.
Partnering for inclusive and sustainable development
Absa has a long track record in commercial agriculture. This has allowed it to gain expertise and develop unique insights into the sector, including opportunities available to emerging farmers. Absa is committed to partnerships that have the potential to deliver meaningful impact for such farmers. “This is where organisations like FFG come in,” explained Brandt. “FFG has a proven track record and has showcased over time that it has the capacity, capabilities and structures to manage projects successfully, allowing the bank to mitigate risk.”
Collateral is another important risk mitigant. However, emerging farmers do not always have tenure. In response to this challenge, Absa partners with credit Khula Credit Guarantee scheme, which allows the bank to fund emerging farmers. “From a social perspective, allowing farmers to generate an income from land they previously couldn’t fund is key to the growth and development of the sector,” explained Brandt. “We now realise the impact our funding has on those communities,” he continued.
Another important aspect the bank considers in supporting emerging farmers is environmental impact. As a business that is committed to ethical environmental practices, Absa is developing new technology that can be used to enhance environmental stewardship in the agricultural sector. FFG was part of a pilot project to test some of this technology.
Overall, the partnership between Absa and FFG has allowed for the implementation of initiatives that are financially viable, have social impact, and contribute to the stewardship of natural resources and climate protection. All of this has been made possible through the financial partnerships between Absa and emerging farmers. As Brandt asserted, “You cannot have social impact if you can’t fund.”
Transformation of the agricultural sector is key to the growth and success of the South African economy. It also contributes to food security and the wellbeing of poor communities. For this to happen, different stakeholders need to collaborate. That collaboration should be centred on relationships that are built on trust and mutual interests. This is key to creating shared value.
Knowledge and skills transfer within the ecosystem is critical to the success of the agricultural sector. This should be underpinned by the localisation of ownership and support structures as well as models that facilitate collaboration and allow emerging farmers to pool their resources and establish economies of scale. There are opportunities for role players to leverage technology for improved efficiencies in the agricultural sector. Technology can also play an important role in environmental protection and climate adaptation.
Written by Connie Huma
Image: Gugulethu Mfuphi, Loffie Brandt
Photo taken by Janelle Strydom