NATIONAL ASSEMBLY
WRITTEN REPLY
QUESTION 1819
DATE OF PUBLICATION: FRIDAY 01 JULY 2011 [IQP No 19 -2011] SECOND SESSION,
FOURTH PARLIAMENT
Question 1819 for written reply: National Assembly, Dr L L Bosman (DA) to
ask the Minister of Agriculture, Forestry and Fisheries:
(1)(a) What amount of capital was initially invested in the Khula-Mafisa
Fund in 2008, (b) what amount is actually allocated annually to strengthen
the fund and (c) what number of beneficiaries of the fund receive (i)
loans, (ii) grants and (iii) other specified financial assistance as at the
latest specified date for which information is available;
(2)(a) how many beneficiaries have been in arrears for longer than (i) six
months, (ii) one year, (iii) two years and (iv) three years and (b)(i) how
much money does each specified person owe the fund and (ii) what action
(aa) has been taken and (bb) will be taken against them in each case?
NW2054E
REPLY
Khula Mafisa Fund was designed and developed as a Portfolio Credit
Indemnity Scheme, funded equally by Khula and The Department of Agriculture
(from MAFISA FUNDS). The fund was supposed to indemnify Banks and other non-
Bank Retail Financial Intermediaries and the Banks were supposed to lend
money (from their Balance sheet) to the emerging farmers. The banks and
other RFIs were restricted to lend at Prime rate +2%. Initially all the
Banks agreed to participate but eventually walked away from the deal
complaining that terms and conditions of the scheme were too stringent.
Hence the scheme failed to take off.
1(a) The Department of Agriculture, Forestry and Fisheries contributed R75
million and Khula contributed R75 million and participating
institutions were to use their financial resources to lend to clients
b) The contribution was once off with no annual allocation transfers.
The scheme was to be reviewed and the demand was to guide future plans
for the scheme
c) The scheme did not take off (not implemented because Khula could not
conclude agreements with financial institutions and as such there is
no beneficiary)
i) Loans â N/A (refer to âcâabove)
ii) Grants â N/A (refer to âcâabove)
iii) Other specified financial assistance as at the latest specified date
for which information is available:
a. The Department of Agriculture, Forestry and Fisheries implemented
the Comprehensive Agriculture Support Programme (CASP) since 2004
to provide financial support in the form of grants to address on-
off farm infrastructure, information and knowledge management,
technical support, capacity building and market information and
development to beneficiaries of land reform as well as to small
holder farmers who privately acquired their land. To date, R3, 2
billion has been allocated to the programme, R2, 7 billion spend
(85%) and reaching 316 880 beneficiaries.
i. 8 523 Loans have been issues, to the value of R209 million,
ii. R54 million has been repaid which is a 26% repayment rate.
iii. ± 6400 jobs have been created.
iv. PS: The information to provide a picture on Mafisaâs
performance against question 2(b) is not available.
In 2008/9 the Ilima-Letsema campaign was initiated to respond to the
departmentsâ objective of fighting poverty and increase
b. Access to finance was branded Mafisa, using intermediaries to
provide loans to smallholder farmers. This approach was as a result
of the Strauss commissionâs recommendation that state should not be
involved in direct credit but create enabling environment for
financial markets to operate effectively and also crowd in
financial services partners. The scheme was established in 2005/6
and to date nine (9) Financial Institutions have been accredited to
retail Mafisa Funds. R320 million has been transferred to these
institutions to provide production loans and asset finance using
MAFISA Credit Policy as a guideline to fund qualifying clients.
Progress to date:
c. e food production in South Africa through farming. The programme
targets subsistence and household food producers supported through
food production and provision of starter packs as well as on
infrastructure that will unlock the agricultural potential of the
area e.g. revitalization of the irrigation schemes (Vaalharts,
Taung and Makhathini). To date, R421 million has
been allocated to the programme, R405 million spend (96%) and
reaching 95 043 beneficiaries.
d. To ensure that the department and government responds adequately to
the needs of farmers and that there is a comprehensive approach to
farmer support that will result in farmers attaining success in
their farming operations, a new financing model has been
established under the leadership of Minister Tina Joemat-
Pettersson, Minister Pravin Gordan and Minister Nkwinti which was
approved by Cabinet in November 2010. This is the Emerging Farmers
Support Facility, using the value chain financing model and will be
primarily used to turnaround the operations of the Land Bankâs
distressed farmers.
e. Within the DAFF, review of the existing funding programmes has been
done and a one stop funding principle is being established. This
proposes that every small holder farmer entering the system should
have a viable business plan and a comprehensive farm plan should be
done. The farmers should have access to:
i. A grant,
ii. Cheap loan,
iii. Technical Support,
iv. Training and Capacity Building,
v. Assured market (partnerships with commodity groups or off-
take agreements in place),
vi. Crop or livestock Insurance
Progress to date:
⢠DAFF is working with National Treasury to determine the
best vehicle for this fund (looking at the current
conditional grants and the current conditions and
ensuring that the one stop principles are part of the
conditions of the grant); and
⢠National Treasury shall duly consider funding requests
in terms of the applicable MTEF strategy and provide
reasonable and necessary programme funds under the
budget;
⢠DAFF has also considered the proposal to partner with
the Land Bank on the Wholesale Finance Facility and
provide cheap loans to farmers through intermediaries.
⢠All of the above should be implemented in the next
financial year (2011/12).
2) a) How many beneficiaries have been in arrears for longer than
1- six months â N/A â Refer to âcâ above
2- one year - N/A â Refer to âcâ above
3- two years - N/A â Refer to âcâ above
4â three years N/A â Refer to âcâ above
b) i) How much money does each specified person owe - N/A â Refer to
âcâ above
ii) What action has been taken or will be taken against them in each case
- N/A â Refer to âcâ above
| | |
 |Name of DFI |Funds Available |Funds Required |Funds Allocated |No. of
Loans to be Issued |No. of Jobs to be Created |Hectars for 2011/12 | | | |
| | | | | | |Perm |Temp |TOTAL | | | | | |1 |NERPO |15,254,972 |35,000,000
|Â |350 |350 |150 |500 |1,077 | | | | |2 |Hlanganani |665,617
|12,960,000 |Â |Â |Â |Â |1,008 |144 | | | | |3 |Kaap-Agri |17,270,778
|14,987,600 |Â |Â |Â |Â |110 |1,624 | | | | |4 |Peulwana |6,604,288
|60,000,000 |Â |1,360 |Â |2,330 |2,330 |1,700 | | | | |5 |MGK
|31,369,926 |Â |Â |Â |Â |Â |0 |Â | | | | |6 |MEGA |48,501,093 |58,864,853
|Â |47 |232 |367 |599 |9,885 | | | | |7 |GEP |9,523,798 |10,000,000 |Â
|20 |Â |Â |0 |1,669 | | | | |8 |Uvimba |18,245,735 |19,500,000 |Â |460
|Â |Â |46 |2,600 | | | | |9 |SASA |17,935,123 | 33,790,191 |Â |1,705
|632 |4,969 |5,601 |4,964 | | | | |Â |Â |165,371,331 |245,102,644 |0
|3,942 |Â |Â |10,194 |23,662.96 | | | | |