Three vital factors for a new farming operation

Establishing new farmers, particularly black ones, is of crucial importance to the success of this country. For this reason, our page on emerging farmer support is under the “Issues here and beyond our border” chapter along with energy, climate change and water, rather than in another, say, with consultants or agribusiness.

It goes without saying that motivation would be on the list of requirements to make a success of farming. It is no use placing people on the land who only consider farming to be “a nice idea”. There must be the resolve to make it work. We are also assuming the existence of things like infrastructure (roads) and natural resources (water).

Three vital factors to successfully establishing a new farming enterprise include:

1. skills
2. access to markets
3. access to finance

Skills would be essential to any new enterprise you begin. This goes beyond the piece of paper you got from one institution or another. It will be important to have access to a mentor, someone who has made it past the obstacles you face.

Access to markets means knowing there is a place where people will buy your produce which enables you to cover your costs and make a profit. Included in this category is producing what people want. Don’t go looking for people to buy your product AFTER you have produced something. Make sure you have a market BEFORE you begin.

Why is access to finance important? You will have to spend money before you can make money. And once you are making money, there may be periods when a delay means you need a loan or finance to get you through a dry patch when not much is happening. Lenders of money require you to have an asset before lending you money. Their money is safe: if you can’t pay back the money, they take over your asset.

The backbone of commercial agriculture is land ownership. A bank, for example, is flexible with how much money you have (or don’t have) because if you are ultimately not able to repay the money they’ve lent you, they can sell your farm. This happens sometimes, of course, but mostly it is a mechanism which gives farmers leeway with the financial ups and downs of farming.

It’s not impossible to farm without owning the land you’re on, but it sure makes things easier! It is for this reason that David Rakgase, a farmer in Limpopo, took the government to court to sell him the farm he has successfully worked for 28 years. He won.

The Landbouweekblad newsletter last Friday carried the story "Staat verstaan nie 'n plaas is soos 'n baba" [State does not understand a farm is like a baby]. Whiskey Kgabo was one of several black farmers who had attended a farmer's day, organised by the Southern Africa Agricultural Initiative (SAAI), to discuss common concerns. Kgabo cannot apply for finance from a financial institution because he does not own his farm.

Under official policy, it is government who will provide/secure the necessary funding. Kgabo’s testimony is that this funding does not respond to the exigencies of running a farm. Financial help is sporadic and – when it arrives – insufficient (and so a farm is like a baby which cannot upon the convenience of relevant but ignorant officials).

Relevant pages on Agribook.Digital are “Emerging farmersupport”, “Marketing” and “Finance for new farmers and SMMEs”. Also, useful overviews are provided by the various livestock and crop pages.

Food industry health risks and how to avoid them

Press release

Every organisation operating in the food industry faces a great amount of responsibility. If errors occur within the manufacturing processes, food cultivation or production, the negative effects can be far reaching and devastating. This is often evidenced by incidences such as the listeria outbreak, pests being found in food, and general poor quality of produce once it reaches store shelves. How are these risks managed, and what steps can facility managers within the food industry take to ensure that their products are safe for consumption?  

One of the biggest challenges for facility managers within the food industry is that demand and production are high, and many facilities feel the pressure of trying to keep up with what is needed. As a result, substandard cleaning practices are often unintentionally employed. In many such cases facility managers feel that they have facilities that are clean because they appear clean. However, as was explained by Dr Juno Thomas in a Times Live interview with the National Institute for Communicable Diseases, not all disease threats are visible. A seemingly clean facility could still be a potential breeding ground for diseases such as listeria; “It can also ‘hide away’ in cracks or niches in factories,” explained Dr Thomas.

So, what practices should facility managers be employing to reduce these risks and ensure that their facilities truly are healthy ones? According to John J Coetzee, CEO at Green Worx Cleaning Solutions, in order to keep up with the demand and ensure that their facilities are properly looked after many facility managers opt for employing contract cleaners to manage their facilities. “Contract cleaners are a great option; however, if the correct contractors are not used employing their services can be very risky indeed.”

Coetzee went on to explain that it is important that facility managers vet their contract cleaners and make sure that they are using appropriate cleaning practices. Facility managers need to ensure that these contract cleaners are using eco-friendly and organic products. Not only are these products better for the environment as a whole and often more cost effective, but they also ensure that the facilities are not being exposed to harsh chemicals and pollutants (which could potentially make the environment even more hazardous for food and the subsequent health of those who consume it). Bio-enzymatic products are also proven to be more effective in eradicating harmful bacteria, by consuming them at the source.  

Maintaining a clean and sanitary facility, and then having to manage the very contract cleaners hired to help lift that load, can feel like a double burden. Coetzee recommends that this is where professional cleaning consultants come in. “Not only do they assess the current state of the facility, they can also guide the facility managers towards an effective and manageable strategy for the cleaning and maintenance of the facility,” he concludes. 

These cleaning consultants also have the expert industry knowledge required to help facility managers select contract cleaners who are cleaning with the most effective and eco-friendly processes and products. 

Relevant reading on AgribookDigital: "Food safety and Traceability" 

Climate crisis cannot be tackled without shift away from damaging land use, major report warns

The way we currently use land is both a major contributor to climate change and placing unsustainable demands on the land systems on which humans and nature depend, according to an authoritative new report presented in Geneva last week.

The Intergovernmental Panel on Climate Change’s Special Report on Climate Change and Land, explores the relationship between climate, people and land in a warming world. It warns that climate change is placing additional stress on land, increasing degradation, biodiversity loss and food insecurity.

Dr Stephen Cornelius, chief advisor on climate change and IPCC lead for WWF, said:

“This report sends a clear message that the way we currently use land is contributing to climate change, while also undermining its ability to support people and nature. We need to see an urgent transformation in our land use. Priorities include protecting and restoring natural ecosystems and moving to sustainable food production and consumption. 

“Good land choices are fundamental to tackling the climate crisis. A shift to sustainable land management must be accompanied by the necessary rapid and deep cuts to fossil fuel emissions if we are to meet the 1.5°C  goal of the Paris Agreement. Action on one alone is not enough.”

Humans use approximately 72% of the global ice-free land surface, with land use contributing around 23% of total human-caused greenhouse gas emissions, primarily through deforestation, habitat conversion for agriculture, and livestock emissions. The removal of forests, conversion of peatlands and other natural ecosystems releases carbon, while at the same time contributing to unprecedented biodiversity loss and land degradation. The food sector alone is responsible  for 75% of deforestation worldwide, with the greatest pressure on forests taking place in the tropics. It is also a major driver of savannah and grassland conversion.

Climate change is already affecting the four pillars of food security - availability, access, utilisation and stability - through increasing temperatures, changing precipitation patterns and greater frequency of some extreme events.

“Delayed action will increase the risk of climate change impacts on food security. Those most at risk are the world’s poorest.

“Early action to address the climate crisis has the potential to provide multiple co-benefits across the whole range of land challenges, with many options contributing positively to sustainable development and other societal goals,” added Cornelius.

Mkhululi Silandela, Senior Manager Sustainable Agriculture with WWF-SA, commented: “This report comes at a time when South Africa is at a cross roads of reviving the economy and managing the triple challenges of poverty, inequality and high unemployment in a changing climate. It confirms that South Africa’s successful turn-around will depend on how we use the opportunity provided by land reform to increase climate resilience, while providing a range of ecosystem services to local communities while contributing positively to sustainable development and other societal goals.”

The report highlights the synergies and trade-offs inherent in our land choices. WWF considers an integrated suite of sustainable land management tools necessary to secure a climate safe future, while supporting food security and nature. Nature-based climate solutions should play a key role. For instance, mangroves help increase climate resilience, while providing a range of ecosystem services to local communities and supporting fish nurseries.

The science presented in the report further underlines that climate, people and nature are fundamentally linked. Efforts to mitigate climate change and halt nature loss must go hand in hand, and be fully integrated with climate adaptation and food security considerations.

Land-based mitigation options make up to a quarter of total mitigation proposed by countries in their country climate plans, submitted to the UN under the Paris Agreement.

“Countries should make full use of nature-based climate solutions, together with other key measures such as reducing fossil fuel emissions, to enhance their commitments under the Paris Agreement by 2020. The first opportunity to announce such bold plans will be the Climate Summit in New York in September,” said Fernanda Carvalho, global policy manager for WWF’s climate and energy practice

On the Expert Advisory Panel on Land Reform and Agriculture

Over the last week, readers will have seen the reports and articles about the findings of the Expert Advisory Panel on Land Reform and Agriculture. Three of the more useful ones we found were: 

• Reuters. 2019, July 29. "Land reform panel recommends seizures without pay in certain circumstances". Engineering News. Available at https://www.engineeringnews.co.za/article/land-reform-panel-recommends-seizures-without-pay-in-certain-circumstances-2019-07-29
• Gerber, Jan. 2019, July 29. "Land reform report: 5 questions answered". News 24. Available at https://www.news24.com/SouthAfrica/News/land-reform-5-questions-answered-20190729
• Erasmus D. 2019, July 30. "Land panel report ‘takes discussion forward’". Farmer's Weekly. Available at https://www.farmersweekly.co.za/agri-news/south-africa/land-panel-report-takes-discussion-forward/

What follows is from Agri SA's press release.

The Advisory Panel on Land Reform, appointed by President Cyril Ramaphosa in 2018 to advise him and the Inter-Ministerial Committee on Land Reform on a way forward with land reform in its broadest meaning and on the issue of compensation. The Panel report covers all the programmes of land reform and contains recommendations on measures for urban and rural land reform. The report addresses aspects such as land tenure in communal areas, tenure security on farms, expropriation, agrarian reform, land demand and beneficiary selection.

Controversial recommendations:

The Panel’s recommendations are comprehensive and, in some cases controversial. Agri SA cannot support these controversial recommendations. Some of the worrying recommendations are:

• The amendment of section 25 of the Constitution to enable expropriation without compensation, a moratorium on farm-evictions and the removal of the 1913 cut-off date for restitution;
• A compensation policy which boils down to a set-formula for compensation to current landowners. The proposal is that there should be a compensation spectrum from zero to minimal to substantial to market-related compensation. There is a suggestion that those who inherited land should be treated differently than those who bought land after 1994.
• Forced on-farm settlements;
• That private title should not be allowed in communal areas;
• The consideration of a land tax,
• Land ceilings;
• A proposal that land for redistribution should be identified at municipal level based on land needs and that the current landowner will be given an opportunity to donate the land, enter into negotiations with the state or face expropriation;
• Water allocation reform where water rights must be re-allocated to smallholder-farmers;
• The regulation of foreign ownership of land.

Other recommendations:

• The Panel recommends a new White Paper process. Whilst Agri SA will always participate in all policy processes that can affect our members, these processes take up a huge amount of time and they take up a lot of resources, also in terms of taxpayers ‘money. From Agri SA’s point of view, and this was also stated in the High-Level Panel Report on Key legislation, the main problems, are not policy related, but can be attributed to poor implementation, inadequate budgets and corruption. These are the things that require priority focus and attention, not the policy side of things.
• A National Land Reform Framework Bill: Although there may be merit in drafting redistribution legislation, it is not entirely clear what aspects such a Bill will address and how. There are indications in the Report that such legislation may be used to target and then forcefully acquire land identified by municipalities as being required for redistribution. This is an invitation for corrupt practices and misuse of power. Coupled with proposals for expropriation without or at minimal compensation, this will exasperate uncertainty in farming areas and further contribute to disinvestment in the farming sector.
• Subdivision of land: Whilst Agri SA agrees that some subdivision may be necessary, wholesale subdivision of a scare resource in the absence of legislation that protects high quality agricultural land, is dangerous for the future of food security in our country.
• Land donations: Agri SA has cautioned that the numbers of farmers who are in a position to donate land should not be over-estimated. Many farmers are struggling to make ends meet and economy of scale is a survival mechanism for farmers. Also, no real incentives are in place as yet to encourage farmers who can do so, to donate land;
• Water rights re-allocation: This is actually a debate on its own. Agri SA needs to point out that water is a scare resource in South Africa and that commercial irrigation farmers make a huge contribution to food production and export earnings.
• Registrable rights for farm dwellers: There are recommendations contained in the report that seem to indicate an intention to register the tenure rights of farm dwellers who are residing on commercial farms and to then enforce those rights in competition with the rights of the current landowner. This reminds one of the 2010 Land Tenure Bill, which was very controversial at the time;

 

Recommendations that can be welcomed, include:

• Measures must be taken to curb corruption;
• A land audit of public and private land that takes into account the Agri SA / ADS/ Landbouweekblad audit results;
• Establishment of a Land Reform Fund;
• Transparent beneficiary selection;
• Strengthening the capacity of the Restitution Commission in order to enable them to expedite claims;
• The development of outcome indicators for successful land reform monitoring and evaluation.

The alternative report:

Agri SA has also studied the alternative report submitted by Dan Kriek and Nick Serfontein. This report focusses on the role of the free market and the private sector in land reform and contains practical proposals of how agricultural land reform can be achieved in a sustainable manner. Important elements of the alternative report are:

• A land depository;
• A land reform fund;
• Joint ventures;
• Farmer support;
• Enablers / incentives for participation by commercial farmers;
• A Social compact
• Beneficiary selection

Agri SA broadly supports the principles of these proposals. We are strongly of the view that land reform in farming areas will take a huge step forward with the establishment of an agricultural development agency where the private sector takes a leading role in driving and financing sustainable land reform. We also believe that we should build on existing best practice models such as the ones showcased at the Bela-Bela land summit last year.

Way forward

Agri SA is concerned about several aspects of the report and particularly the controversial recommendations highlighted earlier. We are of the view that rather than having more time-consuming consultation processes, the focus should be om working together and implementing meaningful projects now. However, should these consultation processes unfold, we will participate fully and make sure that the economic realities, which are not sufficiently addressed in the report are put on the table. In the meantime, Agri SA will continue on full steam with its many transformation initiatives and with the establishment of an agri development fund.

Source: Press release (adapted)

Turning livestock owners into livestock farmers

“We wanted to take people from being livestock owners to being livestock farmers”.

My ears pricked up. The words were spoken by Nicky McLeod at the WWF SA Living Planet Conference in Menlyn, Pretoria. She and Sissie Matela had been awarded the WWF SA 2019 Living Planet Award [see separate blog].

The latest Profile of the South African Beef Market Value Chain (2018) speaks of there being some 240 000 small-scale farmers and 3 million subsistence farmers that own around 5.69 million cattle (DAFF, 2018). The challenge has always been to bring these people section into the value chain. There have been various studies and initiatives to this end (see “Beef cattle farming” page). 

The ideal of nature conservation is when it is linked with the wellbeing of people. This is what has happened since 2013 in the northern part of the Eastern Cape. The Umzimvubu Catchment Partnership – a grouping of Conservation SA and local NGOs like LIMA Rural Development Foundation, the Institute for Natural Resources, and Environmental and Rural Solutions – and the community have undertaken several projects, one of which is Meat Naturally.

Meat Naturally has gone hand-in-hand with rotational grazing and other Good Agricultural Practice – and seen 3 000 hectares of rangeland restored. Mobile livestock auctions have seen R30 million income and 900 resultant “jobs”.

Other projects involve beekeeping, river health, making charcoal and EcoFutures, the latter being a 12-month internship bringing youth into the green economy.

Read more at https://umzimvubu.org

Matatiele duo wins Living Planet Award 2019

Press release

Two women who are the powerhouse behind a non-profit, social enterprise organisation, Environmental and Rural Solutions, based in Matatiele in the Eastern Cape have been named the winners of WWF South Africa’s Living Planet Award for 2019.

Nicky McLeod and Sissie Matela, Living Planet Award winners 2019

Sissie Matela and Nicky McLeod were named the winners of this prestigious environmental award at WWF’s Annual Living Planet Conference which took place in Pretoria yesterday. The award recognises exceptional South Africans who inspire people to live in harmony with nature for the benefit of our country and the wellbeing of all.

This year’s conference delved into South Africa’s food system and the challenges that lie ahead as we grapple with under nutrition and the environmental degradation and climate impact of food production and consumption. Among the participants were celebrity chef Zola Nene, agricultural economist Wandile Sihlobe and the director of the Southern African Food Lab Scott Drimie.

Introducing the award winners, CEO of WWF South Africa Dr Morné du Plessis, said: “Today we honour two women who had a vision 10 years ago, for both people and nature; a vision to engage multiple partners and many local communities while addressing diverse yet inter-connected social and environmental needs.

“Over the last decade, the ERS has convened and led the Umzimvubu Catchment Partnership Programme which brings together 35 organisations to govern the landscape and the water resources in the area. It is here that the vision and passion of these two remarkable woman has created one of South Africa’s most innovative and collaborative approaches and catchment management models.”

The Umzimvubu River and its surrounds is home to some 20% of the Eastern Cape’s population (1.4 million people) and is one of South Africa’s few remaining near natural river systems. With 70% of the land under communal ownership, those who live along its course are highly dependent on the river system for water, grazing, household materials and local food security.

Upon hearing the news of the award, the duo responded: “This is such an honour for us and our little enterprise! We have been plodding along, hoping that we are changing lives and hopefully the grass is growing green and the water is getting clearer. Recognition like this is so motivating and we want to do more. Our progress has not been just due to our own work but also our entire team and the fantastic partners we work with. As the saying goes, a ship cannot sail without the crew!”


More about the winners:

Lipalesa Sissie Matela (Director, ERS): With more than 20 years of hands-on experience, Sissie Matela is a soil scientist by training with a Masters in Agronomy and Soil Science. She has worked as a field soil scientist, university lecturer, researcher, trainer and director of ERS.She co-ordinated a development project in Lesotho and has worked for organisations such as the CSIR, IUCN, the World Bank and the Food and Agricultural Organisation.

Nicky McLeod (Director and Manager, ERS) has worked extensively in rural areas on development initiatives including soil conservation, low-input vegetable production as well as water supply and sanitation. With an Honours in Environmental Science and a diploma in environmental education and permaculture, she has 14 years of hands-on experience. Her skills range from conducting feasibility assessments and drawing up business plans to managing projects and facilitating community workshops. Nicky has also made inputs into policy debates that have led to the formalising of environmental laws in SA.

An account of a morning with the Masisizane Fund

We received (and accepted) the invitation from Nontobeko Vilakati for the 2019 MasisizaneFund Annual Client Market Day (#MasisizaneCMD19). The Masisizane Fund is “a non-profit funding entity established by Old Mutual in consultation with the National Treasury of South Africa following the closure of Old Mutual’s Unclaimed Share Schemes Trust”. It provides crucial support to SMMEs in the agribusiness, manufacturing and franchising sectors. 

I arrived at 107 Rivonia Road, and was shown where the event was taking place: the Old Mutual Retail Space. People milled around and I wandered to the showcased entrepreneur stands.

 The first was from the franchise sector. Masisizane had put up 50% of the capital required to acquire and operate the Caltex service station in 2018. At the far end was a co-funded 100% black-owned and operated legal business, and CTU Manufacturing Primary Co-operative. This co-op manufactures hospital linen and apparel/attire and uniforms. Another Masisizane client offers voice analysis technology (see www.lexforensica.co.za), but it was Bamboo Innovations Africa (BIA), obviously an agribusiness, that caught my attention and I wandered closer. 

BIA was begun in 2012 by Peloyotlhe Gabaraane, initially to manage projects aimed at growing and processing bamboo. For reasons including funding which did not arrive, Gabaraane switched to the fresh produce sector. While Gabaraane is engaged in a discussion with two others, I talk to Clement Mawele (Masisizane Fund) about the Masisizane funding model. Although, like banks, Masisizane takes into account things like assets and turnover, it is more interested in the business plan, the suppliers, market and partners. It was through its provincial offices that Gabaraane approached the Fund.

The opportunity arises to speak to Gabaraane, and excusing myself I step forward and greet him. He explains why he left bamboo after he had picked up an interest in cash crops. He accessed CASP funds offered by the Department of Agriculture which enabled him to become visible, he says. It was the loan from the Masisizane Fund though which enabled him to acquire and construct the closed-circuit hydroponic system in 2018 in the Klupmuts farming area in the Western Cape.  

BIA has 2 hectares under shade tunnels, and since it began operations in September 2018, has sold more than 400 000 heads of lettuce. He speaks of challenges posed by pests and diseases, and how he uses integrated pest management (including biocontrol) to manage these. Among his customers are Shoprite, Spar, Pick n Pay. A packhouse is planned in the future as doors are opening for the business. But proceedings have begun, we must leave it there and I make my way to a chair.

We hear from personnel like Zizipho Nyanga (CEO) and Tabby Tsengiwe how access to funding and markets are the problems for entrepreneurs, and how Masisizane has funded 400 enterprises (29% in agriculture).

A panel discussion takes place, with four clients of the Masisizane Fund answering and discussing questions put to them, and then fielding questions from the floor.

 What is Gabaraane favourite South African brand? The South African flag, he says. There is a South Africa out there that is “real”, he says; that is not trying to hide anything. We should stand behind it. He is very positive of the area and people where he farms, and says the most unlikely characters greet him.

How has Masisizane Fund helped him? He speaks of how Black farmers struggle to become visible; how many opportunities lie just out of reach. He needed infrastructure to grow lettuce, to switch to a better way of farming. Hydroponics is the ideal for him: it is environmentally-friendly; saves water; because the crop isn’t grown in soil it is easier to prepare for market. The assistance provided him means he can compete on a global level now. It is “a complete transformation!”

He describes further the expertise that he has picked up – being able to identify pests and diseases, recognising what nutrients are lacking in the crop and how to address this. Previously he had to depend on another’s expertise. It is “priceless” what he has gained.

His encouragement to budding entrepreneurs is that opportunity will come from someone, somewhere. Diligence right from the beginning is important. The diligence begins with the forms you have to fill in when applying for loans. He speaks about how his lead began with a phone number on the Department of Agriculture website; how after his first unsuccessful interview for CASP funding he refined his business plan and how he applied again because the vetting staff “hadn’t heard him”.

You don’t need “fancy words” to get there. You need vision. And to ASK.

The CTU Manufacturing Primary Co-operative was asked “why the co-operative model?” Her answer was another takeaway. Co-ops teach responsibility and self-reliance. People are partners, not employees. There is accountability on a daily basis. At the end of the day each person knows what their contribution has been because there are agreed measurables to be complied with.

 The keynote speaker, Andile Khumalo, referred to the observation that there are more people in the welfare system than there are in employment. South Africa is a rich country filled with poor people – 55% of the population lives on less than R1 000 a month.

Tambo and Mandela met the challenges of their time. (1)The challenge of today is income inequality. (2) Entrepreneurship is the answer. (3) Creating economic opportunities in townships and in the rural areas – where people live – is where entrepreneurs should focus. Khumalo tells us that Ga-Rankuwa, an area some 40 kilometres north of Pretoria, is the most expensive area in the country to live in – because of the proportion of income that must be spent on travelling to the urban areas.

After a short address by Iain Williamson, Chief Operating Officer. He cuts the Masisizane Fund's birthday cake (it's the 12th anniversary of its founding) and we break for a light lunch.

Relevant pages on AgribookDigital include "Finance for new farmers & SMMEs", "Hydroponics & undercover growing", "Co-operatives", "Vegetables" and "The urban question".