Models for financing agricultural production should keep up to date with the changing landscape. There have been various developments in this regard over the past couple of years, such as digital financing systems, blockchain technologies, data-based recordkeeping, innovative crop insurance models, and artificial intelligence.
South African financing institutions have already changed their approach from being productcentric to farmer-centric, and from a short-term to long-term approach. Financiers have also moved from being risk-adverse to managing risk, from a top-down to a bottom-up approach, and from a transactional to a relationship-based approach.
On top of these changes, alternative finance models are also needed to address the increase in input costs and volatility in the market, as well as to facilitate an inclusive agriculture sector.
In the Nation in Conversation session focusing on finance models during NAMPO 2023, Theo Vorster, facilitator and CEO of Galileo Capital, set the tone of the discussion with the remark that the bank's primary responsibility was towards the depositor, while it still needed to run its own business. He said proper risk management enabled a bank to look after its own interests while also satisfying the client.
Panellists taking part in this discussion were Antois van der Westhuizen from John Deere Financial; John Fiudson from Nedbank; Wikus Grobler from Grainlink; Werina Griffiths
