The Limpopo Department of Agriculture in partnership with national Department of Agriculture, Forestry and Fisheries saw the need to introduce the small medium micro enterprise (SMME) model in order to shift the mindset of small scale farmers to consider agriculture as a business rather than a way of life.
On 25 March 2010, Madzivhandila Agricultural Training Centre gathered farmers to share information on SMME as an excellence model. Farmers from various districts came in numbers, looking forward to benefiting from the information to be shared.
As part of the background, Mr Silumko Mfene indicated that Limpopo was identified as a nodal point to roll out the SMME excellence model. He further said the model was developed to promote a culture of organisational excellence in agricultural business and related business. However SMME excellence model is also used to assess business performance to determine areas of weakness, strength and improvement and thereafter develop an action plan to close the gaps identified.
In order to achieve a successful business, there are eight excellence model to be followed; policy strategy, customer and market focus, people management, resource and information management, impact on society, customer satisfaction, people satisfaction and supplier and partnership performance.
Presenters from various institutions shared their knowledge and practical experience in the agricultural industry. Mr Vusi Ndlozi from Agri-Finance in the Limpopo Department of Agriculture advised farmers on financial issues. He said there is Black Economic Empowerment (BEE) which helps small scale farmers to buy shares from the commercial farms and agricultural finance helps the farmer to acquire land, capital and labour.
Furthermore, he explained some of the reasons that make some farmers fail to acquire funds from the banks. He advised farmers to start “farming for profit”.
“Many people take farming as a hobby hence they are not able to make profit and bank some of the money. Farmers should start to think about farming as a business, they need to register their business with the Department of Trade and Industry (DTI) and also submit their document to the South African Revenue Service (SARS),” he advised.
He discussed the five C’s that are used to assess the farmer when requesting for the funds. He said farmers should indicate willingness to return the money and the experience of the business they want to venture into are considered. The criteria also look into the amount of money the farmer has invested in their business.
This means that the farmer will be disadvantaged if the money in the business is less than the money the farmer is requesting for. He said banks looked at the collateral, therefore if farmers have credits that they did not pay up, then there is no way banks could risk giving farmers a credit.
He stated that banks considered the capacity of the business to make the profits that will be able to pay the required money. He advised that banks consider the sustainability of the business and performance of the product at the market. Farmers applauded to such valuable information.
The small medium micro enterprise (SMME) was established to address this kind of challenges in order to assist farmers run success business. Some intervention that the SMME renders is to assess the agribusiness according to their categories as some might require training while others might require technical knowhow of operational aspects of different enterprise.
The guest speaker of the day was a farmer from Mopani district, Mr. Derrick Bila who could not stop thanking the government for the initiative of the SMME.
“As farmers we are happy that you can see the gap and willing to empower us through programmes such as the SMME. We as farmers working together with the department have to ensure food security and realise that agriculture plays an important role towards economic development of the country” said Mr Bila.
Mr Bila indicated that agriculture was capable of creating more jobs, especially to unskilled individuals. He said if people could become actively involved in agricultural activities and work harder to become commercial farmers, more jobs can be created towards unskilled labourers. He said that due to recession, food prices were very high and the most affected people were poorest of the poor.
Issued by: Department of Agriculture, Limpopo Provincial Government
6 April 2010
Issued by: Department of Agriculture, Limpopo Provincial Government
(http://www.lda.gov.za/)
