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Cape Town - Mlungisi Johnson, chairperson of the parliamentary monitoring committee on the Land Bank, will start proceedings on Wednesday to change the mandate of the embattled financial institution.
The committee's second parliamentary meeting to oversee the Land Bank is set to meet with officials from the agriculture, forestry and fisheries department.
In an interview, Johnson slammed the bank for spending only 6% of its loan book on developing agriculture, saying it is imperative that South Africa's rural areas are developed to ensure food security and farmer development.
This followed a R146m government rescue plan announced on Saturday by Agriculture, Forestry and Fisheries Minister Tina Joemat-Peterssen to prevent some of the 557 emerging and commercial farmers facing repossession by the Land Bank from losing their property.
Johnson said food security and rural development were key priorities in the fight against poverty, but the bank's mandate allowed it to lend primarily to those who already had money.
"We have to train and equip small-scale and emerging farmers to be able to successfully practise commercial farming. The mandate needs to be changed to ensure this happens," he said.
The mandate of the bank was broadened about 10 years ago when it fell under the agriculture ministry to cover loans to "agri-related businesses" in addition to lending to farmers. But forensic probes found that in some cases money was subsequently spent on golf estates and other questionable projects. Several criminal investigations into the bank's operations are under way at present.
The bank, which now operates under the auspices of the treasury and finance department, also charges higher interest rates than commercial banks to its clients.
Johnson said this also needed to be looked at, as it was counterproductive to rural development and land reform.
Regarding government's rescue plan for indebted farmers, the relief was aimed at assisting farmers of all races who suffered operational setbacks beyond their control, Joemat-Peterssen said.
- Fin24.com