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Agricultural Sector Finds Respite in Welcoming Agro-Energy Fund

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9 months ago

August 30, 2023

Agricultural Sector Finds Respite in Welcoming Agro-Energy Fund

The collaborative efforts of the government and the Land Bank have brought about much-needed relief for farmers grappling with the impact of load shedding. The launch of the Agro-Energy Fund, amounting to R1.2 billion, has been met with positive reception from key stakeholders within the agricultural sector. This financial instrument is positioned to mitigate the adverse consequences of energy challenges on farming activities as reported by Food for Mzansi.

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Aimed at bolstering the sector’s resilience, the fund holds the potential to uphold its long-term competitiveness. The timing of the fund’s introduction is particularly pertinent, given the sector’s struggles during heightened load shedding and climatic challenges. The fund’s coverage, encompassing both small and large-scale farmers, offers a promising avenue for growth and development. However, additional private sector support might be required, particularly for agro-processing ventures.

The Agro-Energy Fund is perceived as a breakthrough, especially for small-scale farmers burdened by high electricity bills and productivity losses due to load shedding. This infusion of funds enables them to explore renewable energy systems, alleviating their dependence on conventional energy sources.

Saamtrek Saamwerk coordinator, Sehularo Sehularo, commended the government and Land Bank for their proactive approach to assisting farmers. However, he emphasised the importance of monitoring and accountability to ensure that the funds are allocated appropriately and effectively.

The fund comprises R710 million from Land Bank, matched with R500 million in grant funding from the Department of Agriculture. It encompasses a broad spectrum of farmers, offering different grant percentages based on scale. Smallholder producers qualify for a grant of up to 70% of the financed amount. In comparison, medium-scale and large-scale producers are eligible for grants of up to 50% and 30% of the total financed amount, respectively.

Agricultural Minister Thoko Didiza highlighted that the fund aims to address energy-intensive farming operations by supporting the adoption of alternative energy sources. The Agro-Energy Fund has the potential to benefit over 500 farmers across the nation, encouraging the adoption of sustainable farming practices in line with climate change mitigation goals.

This initiative supports the agricultural sector’s viability and food production and reflects Land Bank’s commitment to environmental responsibility through renewable energy adoption, aligned with global sustainability agendas.