The development of a financing model for agricultural production in South Africa

• Main Author: Oberholster, Jacobus Hoon
• Format: Others
• Language: English
• Published: Nelson Mandela Metropolitan University 2014
• Subjects: Agriculture > South Africa > Finance; Agricultural productivity > South Africa; Agricultural industries > South Africa
• Online Access: http://hdl.handle.net/10948/3041

The world agricultural industry, despite numerous supply and demand challenges, has to significantly increase its production capacity to satisfy the increased demand for food and successfully address the issues surrounding food security. Access to credit is however a key enabler in this regard, while a lack of it limits the adaptive capacity of agricultural producers. The financing needs of agricultural producers however vary and are influenced by the different production systems which have different investment, revenue and risk patterns. The sector is unique in that the risk and uncertainty in agriculture are increased by the nature of agricultural production systems, which is in many cases driven by unpredictable external factors such as adverse weather conditions. In addition agricultural production systems also function within the total food system which consists of a number of interrelated subsystems, each presenting agricultural producers with a unique set of risk factors that need to be taken into account. The development of new and innovative financing solutions for the sector therefore requires a thorough understanding of the multidimensional nature of agriculture and the unique characteristics of the sector. The purpose of this study was to contribute to the development of new and innovative financing solutions for the agricultural sector in South Africa.