THE IMPACT OF FOCUSED AGRICULTURAL
SUPPORT IN LED - By Robson Zimuto [CEO]
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PROGRAMME FOR THE REGIONAL AND LOCAL
ECONOMIC DEVELOPMENT SUMMIT 2012
ADA Presentation
The impact of focused agricultural support in
LED
Special focus on Middelrus/Midlands Outgrowers Project
30th October 2012
ICC Durban
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PRESENTATION BRIEF
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ADA Establishment
Mission, Vision, Strategic Goals & Objectives
ADA Models
ADA & Dept. of Agriculture
Basic achievements to date
Focus on Middelrus/Midlands Out grower
Design of the project
The support
Strategic Partners in planning & implementation
Current status [ Challenges and opportunities to excel]
Future Plans
Expected Impact
Lessons to date
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ADA ESTABLISHMENT
WHO ARE WE??
• ADA is public entity that provides integrated development support
to previously disadvantaged entrant commercial farmers involved
in small and large scale agribusiness operations from farm
production businesses, value addition and marketing
• The main focus of ADA is:
– Capacity building and skills development
– Technical support
– Infrastructure development
– Enterprise and Value chain development
– Access to markets
– Leverage of funds
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ADA Establishment
.....continued
HISTORICAL BACKGROUND
1. At the Cabinet Indaba of June 2009 the DAE (Dept of
Agriculture and Environmental Affairs) presentation included a
proposal for the SPV as an option.
2. Importantly the SPV section of the presentation was linked to
the initial 36 Land Bank Distressed farms.
3. ADA dealt with the 36 farms & assessed more farmers.
4. Assessment resulted;
a. 170 farmers
b. Over 90% are in sugar due to various factors.
c. Turnaround strategy put in place
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ADA Establishment
.....continued
CHALLENGES IN THE LAND REFORM
The following were identified as challenges facing the Land Reform Programme.
i)
Funding for farmer settlement support lacked substantially behind the
investment in land acquisition.
ii) Lack of co-ordination and integration in the planning and implementation of
farmer settlement support services to land reform beneficiaries.
iii) Furthermore, support problems included:
- lack of a comprehensive capacity building & training programme;
- Poor co-ordination of available resources;
- Poor and uncoordinated financial support;
- Limited extension support;
- Lack of access to commodity expertise;
- Unsupported market access and no value chain access;
- Supply of inappropriate technology; and
- Limited access to inputs and technical support services at the
appropriate time.
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OUR MANDATE, VISION AND MISSION
Mandate:
To provide agricultural support services to entrant black commercial
farmers who have acquired land through the government’s Land Reform
Programme and on a private basis.
Vision:
”A vibrant and sustainable agribusiness sector in KwaZulu-Natal province”.
Mission:
The mission of the Agency is to lead and manage the delivery of
appropriate services to enable the agribusiness sector to achieve
sustainable success through partnerships and innovative knowledge.
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STRATEGIC GOALS AND OBJECTIVES
STRATEGIC GOALS
STRATEGIC OBJECTIVES
Improve agricultural
productivity and
competitiveness of black
commercial farmers
Provide business, technical, production and marketing support to
black commercial farmers
Facilitate the provision and development of infrastructure for
commercial agriculture production
Leverage funding for development from government, the private
sector and donors
Facilitate access to opportunities in the agribusiness value chain
Improve the knowledge and skills base of black commercial farmers
Link black commercial farmers to markets
Create employment opportunities for youth, women, the physically
challenged and broader rural community
An effective and efficient
administration that
promotes sound corporate
governance and responsive
service delivery
A fully capacitated human resource able to deliver on its mandate
Promote good governance and a legally sound organisation
Sound and stringent financial management and control
Build and broaden ADA’s brand visibility and brand positioning
Implement ADA wide information and communication system
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CURRENT EMPHASIS
• Complete legislation process
• Complete the database [now at 985 farmers]
• Taking full responsibility of the provincial catalytic projects in
terms of planning & implementation.
• Develop partnerships with authorities and like minded
organizations.
• Value chain studies
• Formalize & fine tuning systems & procedures
• Plan the commercialization of indigenous cattle & goats.
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THE WHOLE
Marketing
Farm
production/
business
0
Value
addition
5yrs
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PROPOSED FARMER FUNDING MODEL
0
Farmer’s
contribution
Government
departments
Donors
Expansion
Change of Product
Marketing Costs
Further investments
etc
Capital items
Working Capital
Information
technology
Development
etc
Development
Finance Institutions
Joint ventures.
Investors etc
BANK LOANS
EVALUATION (Impact)
Feasibility Studies
Business Plans
Market Research
Capacity Building
Technical Support
Loan guarantee
Infrastructure
Legal aspects
Social Facilitation
SOFT LOAN & OTHERS
Evaluation
SCREENING & SELECTION
donations
Evaluation
GRANTS/
Banks, Investors,
Money markets
ADA PLANNING, MONITORING & EVALUATION
5yrs
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Satellite
centres
AGRI-HUB CENTRE
Inputs
Information
Universities
Training
Institutions
Mushrooms
1.Marketing
2.Processing and packaging
3.Branding
4.Quality Control
5.Research & development
6.Information &
dissemination[market, technology]
7.Warehouse & distribution.
8.Training/skills development
9.Organizing Loans
10.Inputs
11.Production/demonstration
Government &
Municipalities
Livestock
Products
Loans
Fruits
G
r
o
w
e
r
s
Financial
Institutions
Donors
C
l
u
s
T
E
R
S
O
u
t
Industry
THE PROPOSED AGRI-HUB CONCEPT
Local Market
Marketing
Agencies
Export Market
Feedback
Off Shore
Partners
Techn. Markets
& fundraising
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Advantages of the Agri-Hub Model
• It links farmers to the markets
• It becomes a pool of services to the farmers for marketing
and inputs.
• Job creation is increased at the out grower level and at the
agri-hub.
• The farmer has a say in the value chain
• More benefits to the farmer
• Market driven
• More land is put under production
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ADA and Dept of Agriculture
• Major funding principal [our mother department to be]
• ADA compliments and not competing
• ADA focuses on business development from farm and into
the value chain.
• ADA focuses on black commercial farmers in the land reform.
• ADA will promote agri-hubs to compliment efforts of DAE and
other departments.
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SOME EXAMPLES OF PROJECTS
Cluster
Examples
Livestock
Makhoba, Besters, Inkululeko,
Sugar, Fruits and Forest
Gledhow, illovo, TSB, Nkhumbuleni
Grain and Vegetables
Siyathokoza, Middlerus,
Others
Essential oils, Chicory
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Livestock Cluster
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VEGETABLE/IRRIGATION PROJECTS
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SUGARCANE and CITRUS
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...Successes
EMPLOYMENT CREATED
From 2010/11 and 2011/12 ADA has created 2058 permanent
jobs on different commercial farms, processing centers and in
the market in addition to incomes raised, skills transferred
and infrastructures developed
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BACKGROUND OF MIDDLERUS
AGRICULTURAL HISTORY OF AREA
• Middelrus – Potatoes, vegetables, fruit (citrus, stone
fruit and apples), soya and oats
• Weenen / Tugela Estates – Potatoes, vegetables & fruit
(citrus, stone fruit and apples), soya and oats
• Muden – Sugar Cane, Pecan, Fruit (citrus stone fruit),
soya, oats and vegetables
• Escourt – Summer veg, potatoes, maize, soya
• Mooi-river – summer veg, seed potatoes, maize, soya
• Craigie Burn – summer veg, seed, com potatoes, maize,
soya
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DEVELOPMENT VISION
ECONOMIC OBJECTIVES
• Increased income (roughly R15000/ha of veg and R30000/ha
for fruit) and 70 jobs per 50ha of fruit ( 3 months) => Total +/1600 jobs p.a.
• Establish Economic HUB of Midlands
• Arable Land back into agricultural production
• Increased agricultural technical & management skills
• Organised access by black farmers and landowners to
vegetable and fruit value chains
• Development of small scale agriculture support system
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COLLABORATION IN PLANNING &
IMPLEMENTATION
Departments.
Entities
Private sector
DRD
ADA
Vrystaat
DAE
Municipality
Cliffie Egbrink
DEDT
Siyathuthuka
COGTA
Market
Premier’s office
Fruit breeder
Insurance co.
KGB
Farmers
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DEVELOPMENTAL VISION
PROJECT STRUCTURE
Market
Oversight
Market
Market
AGRI PROCESSING
SUPPORT Supply Agreements
Institutional / Technical
Equity
3 CO-OP
Bulk Buying / Equip
OUT-GROWERS
40% Commercial
60% Emerging
LAND REFORM GROUPS IN
MIDDELRUS VALLEY
Basic information
Legal body owning land
No. of families
No. hectares
Hlanganani Emketeni Phumelelani Thembanani Ngwazini Gugulethu Zamokuhle Ebuhleni Igqumusha Doornkloof
CPA Trust Trust CPA Trust CPA CPA Trust Trust Trust
47 12 40 28 36 44 26 100 45 10
1035.09 333.46 443.17 355.04 253.60 344.14 121.41 1050.56
182.11
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PROJECT DETAIL – Current Phase 1
Middelrus VEGETABLE joint venture
Emketeni
Gugulethu
Phumelelani
Thembanani
SIYATHUTHUKA Pty Ltd (Prozimax)
Farming (Pty) Ltd –
Community Pty Ltd
Each Community leases arable land to
the Joint Venture and receives
commercial rent
70%
KwaGezubuso Pty Ltd
JOINT VENTURE
30%
Vrystaat farming
Ngwazini
Hlanganani
Management service – help
resolve institutional issues of land
owners, support implementation
of development plans, and
support active participation in &
understanding of JV
MIDLANDS VEGETABLE PROPOSAL
PHASE 2 – OUT-GROWER EXPANSION PLAN
• Increase pack shed capacity in valley
• Encourage similar joint venture or partnership arrangements for est.
production:–
– Craigie Burn
400ha soya, 500ha maize, 100ha vegetables
– Weenen
100ha vegetables
– Muden
100ha vegetables
– Tugela estates
100ha vegetables
– Estcourt
50ha vegetables
– Mooi river
50ha vegetables
– TOTAL (approx) 2000Ha
2500 Jobs
• Requires co-ordination of planting plans for effective marketing
• Requires assessment of and expenditure on agricultural infrastructure –
Irrigation, fencing, operational costs @ avg of R75000/ha
• Requires planning and institutional set up and maintenance support –
R700 000.00 per area or per 8 groups per annum for 5 years (R3m)
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WHAT ARE THE EXPERIENCES FROM
COLLABORATION?
• If there is no one lead agent, there is so much waste of time,
can be pulling in different directions, sitting back, not sure of
the next step, poor planning, no synchronization, costly, in
accurate reports, mistimed activities etc
• Resources & experiences may become available easily
• Confidence is built & bottlenecks are identified and attended
to easily.
• Networking is enhanced
• Implementation moves faster
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COMPLETE BUSINESS PLAN
1. To focus on identifying more agribusiness opportunities e.g..
Livestock
2. To focus at farm level
3. Funding plan
4. Identify investors and more markets
5. Management of the whole project
6. Capacity building & social facilitation
7. Reach more farms to participate in the agri-hub.
8. Encourage maximum utilization of land.
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CHALLENGES IN MIDLANDS
OUT GROWERS & BEYOND
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Lacked single management for long.
Effects of climate change
Delays in planning & funding
Inadequate budgets
Social issues
Mixed farming nature presents complex problems –need for
holistic planning
• Collective approach in commercial farming
• Different expectations at all levels. [the process is naturally
slow]
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LESSONS LEARNED
• Need to identify lead department/organization from the start.
• Conditional grants should not be used in isolation.
• Due to the long historical disadvantages, there is a need for holistic
approach in support of the new commercial farmers.
• More efforts should be put in integration of entrant farmers to
established groups of commercial farmers such as commodity
associations and those in the value chain.
• Working with established commercial farmers brings markets &
skills.
• Working with groups of farmers is a slow process & should involve
the community at large.
• Needs at the level of the family should be considered and
performance at the end should be measured at that level.
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CONCLUSION
We believe that the future prosperity and sustainability
of the agribusiness sub-sector rests on how well the
entrant commercial farmers are developed to enable
them to participate in the mainstream of the economy.
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Thank you
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