Land Bank gains ground: New ways found to pursue developmental role

THE financial turnaround that the Land Bank reported this week is welcome. As welcome as the way the bank is helping to reshape the government’s approach to rural development and agricultural food production.

There were years’ worth of fraud, corruption and general mismanagement to clear out when the National Treasury took the bank over from the Department of Agriculture, and Phakamani Hadebe, the former Treasury official who was installed as the Land Bank’s interim CE last June, is clearly making progress. Various cases of crime and corruption have been referred to the relevant law enforcement agencies. Bad loans have been written off. And the bank’s profit on continuing operations jumped to R369m for the year to March, up from R219m . Much has still to be done, but the Land Bank is no longer the dodgy place it once was.

It is also, importantly, developing new ways to pursue its developmental role. Although as a state-owned development finance institution it was always supposed to be playing a role that private sector banks could not, in practice it had been doing very little to promote rural development or black farmers. And what little it did do was none too successful. That’s evident from the 283 emerging black farmers whose defaulted mortgages the new Department of Rural Development will now take on.

The bail-out by the new department is one reflection of the new partnerships with key players that the bank is entering into in pursuit of its mandate — and in pursuit of the new administration’s focus on promoting effective economic development in rural areas. It will work with the government departments involved. But it is also building relationships that could make for more successful new farming ventures and give small farmers a better chance of survival — relationships with established agricultural co-operatives, commercial farmers and agri-businesses.

The government recognises that just transferring land to black owners will not create effective black farmers nor increase SA’s food production. New models are needed and the Land Bank looks well placed to contribute.