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#BudgetSpeech2019: John Deere welcomes R3.7bn budget support for emerging SA farmers
Land reform was a key focus for Finance Minister Tito Mboweni's maiden budget speech which saw him allocate R1.8bn for the implementation of 262 priority land-reform projects over the next three years; in addition to the R3.7bn set aside to assist emerging farmers seeking to acquire land to farm. Mboweni also announced that the Land Bank will support smallholders, and leverage partnerships with other financial institutions by disbursing R3bn in the next fiscal year.
Michaelgoima via Wikimedia commons
John Deere has welcomed the R3.7bn to assist emerging black farmers in acquiring land and title deeds, which it believes will complement the proposed blended finance model and assist in building a more inclusive agricultural sector for the benefit of all South Africans.
"We acknowledge that the unfavourable macroeconomic conditions largely due to weak economic growth and rising demand for government expenditure left very little room for the Finance Minister to increase budget allocations but we believe he has done very well in the circumstances," said Jacques Taylor, managing director for sub-Saharan Africa at John Deere.
"Transparency in how the funds will be allocated as well as collaboration with the private sector could go a long way towards ensuring the sustainability of the projects."
John Deere operates across Africa and is involved in providing mechanisation solutions to both large and small-scale farmers across the continent. In South Africa specifically, John Deere through John Deere Financial, has for the past four years been involved with Grain SA’s New Age Farmer project where it sponsors a John Deere tractor to the winner of the New Age Farmer of the year; also pioneering a contractor model in Kenya and neighbouring Uganda, which assists small farmers with acquiring tractors.
Another feature of the 2019 budget speech was the increase in the fuel levy, which amounted to the total of 29 cents per litre for petrol and 30 cents per litre for diesel (including the carbon tax of 9c a litre on petrol and 10c on diesel). The good news for the agriculture sector was that the diesel refund increased from R3.22 per litre to R3.33 per litre on 80% of eligible use.
"Agriculture is, to a large degree, a price taker both on the input side as well as the output side so any increase in cost has a direct impact on the producers’ profitability and cost structure. The increase of 11c in the diesel rebate for agriculture is welcomed and will offer some relief," said Taylor.
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