Thomas Mutsvene, Heinz Eckart Klingelhöfer
Abstract
Drawing lessons from existing literature on agriculture funding, this paper aims to develop a private equity funding model for emerging farmers and for resuscitating abandoned agricultural projects in South Africa. A desktop research approach that uses publicly available literature from the field of agricultural investments and farming on agricultural funding was used to derive the shortcomings of current funding models and the need for designing a private equity funding (PEF) model. The PEF model shows how private equity funding pools and invests funds to achieve smart agriculture. The PEF model can link up agriculture technology suppliers and the government, allowing emerging farmers’ access to financial resources, infrastructure development, and markets.
The PEF model assists strategy formulation and implementation, confidence and reputation, as well as value creation among emerging farmers. It helps achieve sustainable agriculture and financial stability and promote independence, and increased commitment of emerging farmers in South Africa. Using private equity in funding emerging farmers operations in South Africa sets a new platform for the agricultural development funding research discourse. The PEF model helps increase private sector participation in funding emerging farmers, thus, contributing to improving food security.