Developing a business proposal template in support of the establishment of a livestock farm in South Africa

Abstract

South Africa is faced with numerous challenges including high unemployment, severe poverty, food shortages, poor rural economic development and rural migration. There is an urgent need for the South African government to deal with the abovementioned challenges. In an attempt to address some of these challenges, the government embarked on agricultural development programmes. The greater part of these programmes involves the commercialising of smallholderand emerging farmers. This commercialisation would assist in providing employment, reducing poverty, increasing food production and food security, and uplifting the rural economy as most people, who are interested in agriculture are located in rural areas. The commercialisation of emerging farmers, however, faces several obstacles including access to finance. The government, commercial banks and independent financial institutions have introduced financial initiatives that are aimed at agricultural development. Despite the financial support provided, emerging- and small-holder farmers still struggle to obtain credit. This is partly due to the complicated application processes and lack of collateral needed as security for the debt. The credit application process requires a farmer to submit a business proposal, which will be evaluated and used as a basis to determine the success or failure of the emerging farmer’s credit application. There is, however, a need for a business proposal template that addresses the fundamental aspects of a sound business proposal. This study was aimed at addressing this need through the development of a business proposal template that could be used by livestock emerging farmers when applying for seed funding. Livestock farming as a sub-sector of agriculture was selected as it is a common practice in most rural areas in South Africa and there is currently a shortage of livestock products in the country. Therefore, commercialising it could contribute to agricultural- and rural development. The findings highlighted that a sound business proposal for a seed funding credit application should address the following six components: the entity or individual’s background, the farm management, the farming strategy to be implemented, the farm infrastructure and resources, the financial forecast and financial analysis, and the type of financing required. The study concluded by drafting a business proposal template that could be used by emerging farmers when applying for seed funding to establish a livestock farm.