Parliament urged to call urgent talks on Land Bank after it defaults on loan

The Land Bank has skipped repayments on its revolving credit facility, triggering a default that may push a call from creditors for as much as R5.7bn from the government.
The Land Bank has skipped repayments on its revolving credit facility, triggering a default that may push a call from creditors for as much as R5.7bn from the government.
Image: 123RF/Helen Filatova

The DA has called on parliament to hold an urgent meeting to discuss the future of the Land Bank, the state-owned specialist lender to commercial and emerging farmers.

This follows news that the bank had skipped repayments on its revolving credit facility, triggering a default. This may push a call from creditors for as much as R5.7bn from government.

Annette Steyn, DA shadow minister of agriculture, land reform and rural development, said the Land Bank's woes had been brought on by the fact that for years, government had been slow in its response to droughts and other agricultural disasters.

"This resulted in the Land Bank being unable to maintain a low default rate.

"Impairments and defaulting clients increased, which had an inevitable knock-on effect as some of the intermediaries the Land Bank uses to extend their facilities to were also affected by this problem," Steyn said.

She said the financial and operational conditions at the bank were a cause for great concern, especially in light of the myriad challenges farmers were facing in the lockdown.

"These challenges must be prioritised by parliament during this time, and regular agriculture meetings should be placed on the parliamentary schedule."

Steyn said she would write to the speaker of the National Assembly, Thandi Modise, to request that the agriculture, land reform and rural development portfolio be included in the essential portfolios that meet during this time.

She said the recent drought and outbreak of diseases such as foot and mouth disease had placed the South African agricultural sector at massive risk.

Steyn said agricultural debt was growing and was estimated at R200bn currently. She said  25% of the debt book of agriculture was funded directly through the Land Bank.

She said the failure of the Land Bank, established in 1912 with the mandate to support the development of farmers, would be disastrous for many farmers.


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