Evaluattion of farmer financing : the case of Molopo and Ditsobotla Developing Farmers

Abstract

The research was carried out in the Ditsobotla and Molopo districts in the North West Province. The main activity in the districts mentioned, particularly Ditsobotla is crop farming. The main objective of the research was to evaluate the accessibility of developing crop farmers to finance. This is in the light of the fact that certain recommendations were made by the Strauss Commission, the main one being the mandating of the Land Bank to supply financial services to, among others these farmers. The aim of this research was therefore to assess the extent to which these recommendations have improved accessibility of farmers to finance. The data was collected through questionnaires in the research area, that is, the mentioned districts. One hundred and five (105) farmers were interviewed. The result of the research revealed that the accessibility to finance by farmers is poor. The main impediment was determined to be their historical debt with the former Bophuthatswana homeland bank (Agribank). They also do not have collateral. This aspect makes them not to be creditworthy. Due to this, the majority of those who acquire loans a re financed in the range o f R 25 0 00, which is the category, according to Land Bank, which does not need collateral. The other findings pertaining to their characteristics are that: the majority of the respondents are old and are earning government pensions; they do not have own land and most of them farm leased land; most of them are wholly dependent on farming i.e. they do not have alternative sources of income. In the absence of financial support for production, the means of livelihood is therefore severely threatened.