Article
The Draft SMME Classification Regulations and the Business Licensing Bill, 2025
Published: 05/11/2025
The Draft SMME Classification Regulations and the Business
Licensing Bill, 2025 could quietly
reshape how South African agriculture is regulated and supported. Together,
they determine who counts as a “small business” in law and how enterprises
across the value chain are licensed to operate, from farm stalls and
cooperatives to packhouses, agro-dealers and processors. Agbiz broadly supports
the intention to modernise and standardise these frameworks, but we do have a
few important concerns about how they will work in a volatile, seasonal sector
like agriculture.
The Draft SMME Classification Regulations and the Business
Licensing Bill, 2025 could quietly
reshape how South African agriculture is regulated and supported. Together,
they determine who counts as a “small business” in law and how enterprises
across the value chain are licensed to operate, from farm stalls and
cooperatives to packhouses, agro-dealers and processors. Agbiz broadly supports
the intention to modernise and standardise these frameworks, but we do have a
few important concerns about how they will work in a volatile, seasonal sector
like agriculture.
The SMME regulations retain simple employment bands but raise
turnover thresholds and align them more closely with industry realities. For
Agriculture, Forestry and Fishing, the proposed ceilings (up to R15 million for
micro, R45 million for small and R100 million for medium enterprises) mean that
more farms and agribusinesses could qualify as SMMEs. This should, in
principle, expand access to SME-linked finance, grants, and enterprise- and
supplier-development opportunities and improve consistency across government
programmes. Our concern is that agriculture’s highly volatile turnover and
seasonal labour spikes could lead to misclassification – for example, where a
once-off bumper crop or export contract temporarily pushes an otherwise small
enterprise over a threshold, with the risk of suddenly losing support. We have
therefore urged government to guard against “cliff-edge” effects and to clarify
how mixed indicators (turnover vs headcount) will be treated.
The Business Licensing Bill aims to replace the outdated 1991
regime with a clearer national framework for when a licence is required, how it
is issued, and how compliance is enforced. For agriculture, this could help
bring greater predictability for farm stalls, traders, agri-tourism ventures
and other small operators, especially if municipalities actively use the Bill’s
provisions to streamline processes, reduce fees and create designated trading
areas for small businesses. Our main concerns lie in the risk of duplication
with existing sectoral permits (e.g. food safety, veterinary, plant health,
land-use approvals), the capacity of many municipalities to administer licences
efficiently, and the potential for heavy-handed inspections or seizures to
disrupt perishable supply chains.
Recent permit disputes involving informal traders in the City of Johannesburg highlight why the design of this framework matters. Where licensing powers are broad but processes are unclear or poorly managed, enforcement actions can result in permit cancellations, removals from trading areas and long periods of uncertainty for small operators. Many of these traders handle fresh produce and other farm-derived products, so disruptions in licensing directly affect agricultural market access and food security in low-income urban areas. The Bill will need firm safeguards, service standards and appeal mechanisms to avoid replicating these problems at a national scale.
In combination, these two instruments could support a more
enabling environment for agricultural SMMEs – but only if the final versions
are carefully aligned with the realities of farming and agribusiness. Agbiz
therefore welcomes the overall direction of reform, while flagging that
misclassification risks, administrative duplication, uneven municipal capacity
and unclear implementation rules will need to be addressed to ensure that the
new frameworks lighten, rather than add to, the regulatory burden on South
African agriculture.
By Thapelo Machaba, Agbiz