ADVERT A PUBLIC CALL FOR APPLICATIONS FROM ELIGIBLE AGRICULTURE AND AGROPROCESSING BUSINESS ENTERPRISES AND ENTERPRENEURS FOR EASTERN CAPE AGRICULTURE AND AGROPROCESSING BLENDED FINANCE SCHEME

Introduction

Eastern Cape Province is known for diverse agriculture production potential owing to environment. Also, with majority of households practising agriculture and population living in rural areas with no commercial land rights. The provincial agriculture performance is characterized by sector dualism with majority of farming population limited by poor technological inputs, low production, a traditional farming system, inadequate credit services and facilities, poor
infrastructure, and market instability. Agriculture as an important economic sector is important in the pursuit of inclusive, labour-intensive economic growth: rural linkages, ability to absorb less-skilled labour, large multipliers due to extensive links with the rest of the economy, globally competitive labour productivity, and importance for export-led growth. Despite these advantages, the sector continues to experience low growth and declining employment.

The AAMP (2022) recognises that for a meaningful and impactful transformation of agriculture and agro-processing value chains, there is a need for special programme for increasing production and improving market access for black agri-SMEs. This special program must unlock potential in the underutilised resources and improving the productivity of small-scale and subsistence producers through well-coordinated and practical support measures. This special program must ensure better coordination between government and private sector. The key elements of this program should be financing structure, improved access to markets, targeted technical support and improve technology transfer to producers.

There is extensive evidence that investment and sustainable land management are positively correlated (Gedefaw et al; 2020). The current agriculture funding tools are directed to commercial farmers and are not reaching the developing farming sector (Mthombeni, Bova and Thibane; 2010). Also government grant funds that are directed to projects are not achieving business sustainability thus significant failure rate of land reform projects. The blended finance aims to leverage public and private sector resources to increase investments that will unlock and enhance agricultural value chains through targeted financial and non-financial support to black farmers.

Through facilitating interface between the commercial banks, intermediaries and DFI’s to develop the value chains beyond the short term profit but focus on developmental outcomes and impact. It seeks to drive diverse and inclusive agriculture sector through supporting agri-SMEs that are majority black owned agri-businesses. Targeted commodities are export orientated (for growth), labour intensive (for employment) and catalysts for unlocking other commodities (broader participation) such as grain, livestock, poultry,
piggery, vegetables and nuts This initiative is expected to increase volumes and value of both
primary and agro-processing contribution to the economy of the province.

The Department of Rural Development and Agrarian Reform (DRDAR) will therefore integrate and align all available financial instruments in order to support the producers comprehensively to achieve developmental objectives and financial sustainability. This ECAABFS is guided by the principles of the draft National Policy on Comprehensive Producer Development Support (NPCPDS).

GUIDELINES: BUSINESS PLANS FOR ACCESSING FUNDING FROM THE AGRICULTURE AND