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1 THE IMPACT OF FOCUSED AGRICULTURAL SUPPORT IN LED - By Robson Zimuto [CEO]
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Transcript of 1 THE IMPACT OF FOCUSED AGRICULTURAL SUPPORT IN LED - By Robson Zimuto [CEO]
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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 PresentationThe impact of focused agricultural support in
LEDSpecial focus on Middelrus/Midlands Out-
growers Project 30th October 2012
ICC Durban
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PRESENTATION BRIEF1. ADA Establishment2. Mission, Vision, Strategic Goals & Objectives3. ADA Models 4. ADA & Dept. of Agriculture5. Basic achievements to date6. Focus on Middelrus/Midlands Out grower 7. Design of the project8. The support9. Strategic Partners in planning & implementation10. Current status [ Challenges and opportunities to excel]11. Future Plans12. Expected Impact13. Lessons to date
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
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
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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.
ADA Establishment .....continued
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Mandate: To provide agricultural support services to entrant black commercialfarmers who have acquired land through the government’s Land ReformProgramme 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 ofappropriate services to enable the agribusiness sector to achievesustainable success through partnerships and innovative knowledge.
OUR MANDATE, VISION AND MISSION
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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STRATEGIC GOALS AND OBJECTIVES
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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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Farm production/
businessValue
addition
Marketing
0 5yrs
THE WHOLE
GRANTS/donations
Feasibility StudiesBusiness Plans
Market ResearchCapacity BuildingTechnical SupportLoan guaranteeInfrastructureLegal aspects
Social Facilitation
Farmer’s contributionGovernment departments
Donors
Capital itemsWorking Capital
Information technology
Developmentetc
Development Finance Institutions
Joint ventures.Investors etc
ExpansionChange of Product
Marketing CostsFurther investments
etc
Banks, Investors,Money markets
SOFT LOAN & OTHERS BANK LOANS
0 5yrs
PROPOSED FARMER FUNDING MODEL
ADA PLANNING, MONITORING & EVALUATION
EVAL
UAT
ION
(Im
pact
)
SCRE
ENIN
G &
SEL
ECTI
ON
Eval
uatio
n
Eval
uatio
n
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AGRI-HUB CENTRE1. Marketing2. Processing and packaging3. Branding4. Quality Control5. Research & development6. Information &
dissemination[market, technology]7. Warehouse & distribution.8. Training/skills development9. Organizing Loans10.Inputs11.Production/demonstration
Local Market
Export MarketMarketing Agencies
Vegetables
LivestockProducts
Mushrooms
Grain
Feedback
Uni
vers
ities
Tr
aini
ng
Insti
tutio
ns
Gov
ernm
ent
&M
unic
ipal
ities
Indu
stry
Fina
ncia
l In
stitu
tions
Don
ors
THE PROPOSED AGRI-HUB CONCEPT
Off ShorePartners
Techn. Markets & fundraising
ClusTERSOut
Growers
Inputs
Fruits
Information
Loans
Machinery hire
Satellite centres
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• 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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Advantages of the Agri-Hub Model
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
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Cluster Examples
Livestock Makhoba, Besters, Inkululeko,
Sugar, Fruits and ForestGledhow, illovo, TSB, Nkhumbuleni
Grain and Vegetables Siyathokoza, Middlerus,
Others Essential oils, Chicory
Livestock Cluster
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VEGETABLE/IRRIGATION PROJECTS
SUGARCANE and CITRUS
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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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...Successes
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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
DEVELOPMENTAL VISION PROJECT STRUCTURE
Market Market Market
Oversight AGRI PROCESSING Equity
SUPPORT Supply Agreements 3 CO-OPInstitutional / Technical Bulk Buying / Equip
OUT-GROWERS 40% Commercial 60% Emerging
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LAND REFORM GROUPS IN MIDDELRUS VALLEY
Basic information Hlanganani Emketeni Phumelelani Thembanani Ngwazini Gugulethu Zamokuhle Ebuhleni Igqumusha DoornkloofLegal body owning land CPA Trust Trust CPA Trust CPA CPA Trust Trust TrustNo. of families 47 12 40 28 36 44 26 100 45 10No. hectares 1035.09 333.46 443.17 355.04 253.60 344.14 121.41 1050.56 182.11
PROJECT DETAIL – Current Phase 1Middelrus VEGETABLE joint venture
Emketeni Emketeni GugulethuGugulethu PhumelelaniPhumelelani ThembananiThembanani NgwaziniNgwazini HlangananiHlanganani
Vrystaat farming Vrystaat farming
SIYATHUTHUKA Pty Ltd (Prozimax) Farming (Pty) Ltd – Community Pty Ltd
SIYATHUTHUKA Pty Ltd (Prozimax) Farming (Pty) Ltd – Community Pty Ltd
KwaGezubuso Pty LtdJOINT VENTURE
KwaGezubuso Pty LtdJOINT VENTURE
70%70%
30%30%
Management service – help resolve institutional issues of land owners, support implementation of development plans, and support active participation in & understanding of JV
Management service – help resolve institutional issues of land owners, support implementation of development plans, and support active participation in & understanding of JV
Each Community leases arable land to the Joint Venture and receives commercial rent
Each Community leases arable land to the Joint Venture and receives commercial rent
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MIDLANDS VEGETABLE PROPOSALPHASE 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 level3. Funding plan4. Identify investors and more markets5. Management of the whole project6. Capacity building & social facilitation7. 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
• 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]
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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