Ramaphosa Puts Farm Sector Transformation on Government

President Cyril Ramaphosa has put the accountability question squarely with government and its financing institutions, framing the persistence of a largely untransformed commercial farming sector as a matter of national policy. In his latest newsletter, the President argues that reliance on a relatively small segment of the population for the country’s food needs is unsustainable as the population grows and demand for food rises with it. The numbers behind the concern are stark: a sector that has more than doubled since 1994, yet one in which black farmers account for only around 10% of commercial output.

The centrepiece of the state’s response is the Land Bank’s Blended Finance Scheme, started by the Land Bank together with the Department of Agriculture. The instrument combines government grant funding with loan finance, and is designed to address a persistent policy failure: emerging farmers are too often trapped at subsistence level because they cannot obtain financing for farming inputs, infrastructure and additional land.

The scheme is already being tested in practice. Last week the President visited Redlands Farm, a commercial dairy operation in Stutterheim in the Eastern Cape owned and run by young black farmers. The farm has expanded its operations with the Land Bank’s support as a beneficiary of the blended finance scheme. In the President’s assessment, Redlands demonstrates that with effective partnerships, a transformed agricultural and agribusiness sector can boost the rural economy and create jobs. Over the years, commercial banks have also joined the programme, and government now wants to encourage other agribusinesses and commercial banks to participate and to develop further funding instruments to support agriculture.

What changed: the policy case now rests partly on evidence. A 2025 study by the University of Pretoria found a strong correlation between investment in agriculture and poverty reduction. The farming sector employs around 944 000 people, with an additional 200 000 workers across the broader value chain. The sector’s scale is considerable. South Africa is the world’s 32nd largest agricultural exporter, with record exports of R270 billion in 2025, spanning table grapes, maize, beef, wine, citrus, sugar and wool, among other products. The African continent accounts for nearly half of farm product exports, with the remainder going to the European Union and countries in Asia, the Middle East and the Americas.

Innovation in seed breeding, animal genetics and farm inputs has improved productivity and efficiency across the country’s farmlands. Yet the President acknowledges that many communities have remained on the periphery of this success, a situation often described as ‘two agricultures’, in which predominantly white-owned commercial farms account for the bulk of output. He argues that transformation of the sector is both necessary for the broader transformation of the economy and critical to food security.

The policy response begins with land. Through the Proactive Land Acquisition Strategy, government is releasing approximately 2.5 million hectares of state-owned land in various parts of the country to black farmers and providing them with title deeds. The President describes titled access to land as the first step in building a new generation of South African farmers. But land, he cautions, is only one ingredient. Knowledge of crops, weather and animal disease comes from practical experience and from learning alongside established farmers.

Here the state is leaning on industry structures. The President commends programmes run by commodity associations, including the Citrus Growers’ Association, Grain South Africa, National Wool Growers’ Association, Potatoes South Africa, Red Meat Industry Services, Milk Producers’ Organisation and Fruit South Africa, describing their work in building an inclusive farming economy as admirable. Alongside land and skills, he identifies affordable, patient capital as the third ingredient for a successful new-era commercial farming enterprise.

Government’s wider agenda includes a concerted drive to expand and diversify export markets, with engagement alongside agribusinesses and farmers on issues such as new breeding techniques and advances in agricultural biotechnology. Further context on the sector’s potential is set out in a government publication at https://www.gov.za/blog/agriculture-south-africa-has-immense-potential-further-growth.

The President’s message is that the sector holds immense potential for growth and jobs, and that through strong partnerships between government, farmers, business, lenders, traditional leaders and communities, more land can be brought under cultivation, a new generation of black commercial farmers can be created, and the country can grow enough not only to feed all its people but to sell to markets across the world. Whether the blended finance model and the release of 2.5 million hectares can close the gap between policy intent and the sector’s still-skewed output remains the open question for the institutions now charged with delivering it.