WHO ARE WE
Let’s create an inclusive and sustainable modern agricultural sector in South Africa...
One of the key characteristics of the agriculture industry today is the level of industrialisation, resulting from the demand from consumers for quality, affordability, choice and safety. Increased urbanisation and population growth are placing more and more demands on agriculture to provide in the nutritional needs of the consumer in a healthy and sustainable manner. Agriculture needs to respond to this change in demand patterns by producing sustainable products that are affordable and safe.
Being part of a value chain creates an enabling environment where an emerging farmer can become part of the main-stream agricultural sector and reduce the risk for all parties involved. It creates the opportunity to fund the commercialisation of emerging farmers in a sustainable manner.
Why is an agency like Agricultural Development Agency necessary?
Most emerging farmers in South Africa are outside the main-stream value chains and unable to gain access to it without the necessary support.
The New Agri BEE Sector Code was published in December 2017, formalising the transformation targets for the agriculture industry. Through the enforcement of the Code, Government will be placing a renewed focus on transformation in the agriculture industry.
Government will not be directly involved with AGDA, which is an entirely private sector funded, managed and administrated Agency. Government is however fully supportive of the Agency and its aims of empowering developing black farmers.
What will the Agricultural Development Agency do?
The Agency does not strive to be all things to all people but will work to facilitate skills transfer from commercial farmers and private sector agri-businesses to identified beneficiaries. This will be achieved by supporting existing initiatives and by funding targeted projects.
The AGDA Integrated Farmer Development Programme (IFDP) will provide participating emerging smallholder farmers with development services such as whole farm assessments, development plans, skills transfer, partnership, accounting services and project management services.
The programme will enable these farmers to implement the key success factors required for successful industrialisation and commercialisation. The focus will be on capacity building, skills transfer, market readiness and market access. The IFDP will empower emerging farmers to participate in existing market access value chains.
The IFDP will be funded from Impact Capital Sources, providing mainly grant funding for the development of these farmers. After graduating from the IFDP emerging smallholder farmers will be enabled to gain access to the Revolving Loan Fund (RLF) in order to scale their businesses to commercial levels.
How will funding work?
The Revolving Loan Fund (RLF) will raise capital from various sources and on-lend it to commercialising farmers in a defined value chain. Capital will be recycled to enhance the reach of the Fund. The three sources of funding will be private equity, impact capital and commercial debt.
AGDA will enter into co-operation agreements with various industry organisations that will provide the emerging farmers with enterprise development services such as feasibility studies, preparation of business plans, training and mentoring, technical services, accounting services and project management services.
This funding and support model brings together all the key success factors required to reduce the funding risk to acceptable levels, creating the opportunity to spread the risk among different participants.
What are the Agricultural Development Agency's goals?
Through a combined effort AGDA will achieve the following impact: direct job creation at farm level; indirect job creation throughout the value chain due to increased activities; food security; training and skills transfer for all employees; business management training for emerging farmers; wealth creation for emerging farmers; transformation in the Agricultural sector.
Why you should get involved...
The three sources of funding will be housed in three different investment vehicles, providing an effective way of investing for funders. A Venture Capital Company (VCC) will provide private equity investors with a taxation benefit, a Not For Profit Company (NPC) will ring-fence impact capital (donor funds) and an Investment Holding Company, that will be a Qualified Small Enterprise (QSE) in terms of the BEE Act, will provide commercial lenders with the opportunity to earn Enterprise Development points on their BEE Scorecards. Combining different sources of capital will reduce the overall cost of capital for emerging farmers. Keeping the funds separate allows for each class of investor to earn its required return.
Developing a sustainable and inclusive agricultural sector in South Africa will contribute massively to household food security, job creation, rural development, meaningful land reform and emerging farmer empowerment.
Our Board of Directors
The AGDA board of directors represent partners across the agricultural value chain. Each of them has years of experience in the agricultural and agribusiness sector. They bring to AGDA their diverse skills and network of partners.
Dr Mathews Phosa
Dr Pieter Taljaard
Public Private Partnerships
Financial Services Sector
Chief Executive Officer