Black Economic Empowerment: not only the transfer of land

Afgri Farming has come up with an innovative way of addressing BEE. Instead of redistributing land, they have developed a new model to put land already owned by blacks back into productive use. Sharon Gotte reports.
Issue date: 16 May 2008

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Does BEE in agriculture

only mean giving more land to black South Africans and having more black farmers? Surely BEE must also mean using land owned by black farmers more productively and thereby improving the distribution of wealth in rural areas? This is precisely what Afgri Farming has set out to do. Established in September 2007, Farming is a division of Operations Ltd and was formed to address one of the three pillars of their BEE strategy – to do more business with black partners.

A model for success

According to Robert Wesseloo, MD of Afgri Farming, their farming model is currently operating in six areas – Lichtenburg, Bronkhorstspruit, KwaNdebele, Qwa Qwa, Ongeluksnek, Makhoba and Lesedi. In many of these former homeland areas, people were given land, tractors and equipment by the pre -1994 government, but without farming knowledge or technical support, much of the equipment now sits idle and rusted. Tractors lie where they were parked many years ago, unused and now beyond repair. They bear witness to a failed effort to empower these black farmers. Meanwhile, those who are still trying to farm face high costs to get their maize to the market, as well as logistical problems trying to access seed, chemicals and fertiliser. Yields are low as the farmers fight a losing battle with grass and weeds. Their soil is often neglected and in poor condition.

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“Many black farmers in these areas have now entered into agreements with Farming, whereby they contribute their land, and contributes knowledge, resources and expertise. The parties are bound by a profit-sharing arrangement,” explains Wesseloo. rationale behind this model is to combine underutilised portions of land into economically viable blocks of at least 2 000ha. The individual portions of land (which range from 15ha to 200ha) are in close proximity to one another to aid logistics. “Each site is supervised by a site manager familiar with the area and its conditions and, very importantly, who speaks the local language.” The 12 000ha across six sites are planted to grain and farmed for sustainability and maximum profit.

Potential for growth

In 2008/09, the area under this model will increase to 40 000ha and one year later it is envisioned that 80 000ha of maize will be cultivated. Wesseloo says that “each site aims to utilise local labour to aid job creation. This is crucial, as these areas are mainly the former homeland areas with little income-generating potential.” While the land is farmed on behalf of its owners, Afgri also holds regular farmers’ days to help upskill the owners, with the aim that one day, should they wish to, they will be able to farm the land themselves.

One of the six sites, situated in KwaNdebele, covers over 4 000ha and is expecting a maize yield of between 4t/ha to 6t/ha while a break-even yield of 3,3t/ha is required. As this model is in the early stages, there have naturally been some hiccups in getting started and delays in planting some crops. “The maize that was planted late is not doing as well as the early planted crop and is expected to slightly decrease the overall yield,” says Daniel Bosman, site manager at KwaNdebele. “However, in some areas within the site, we expect to reach 7t/ha.”

Positive signs and growth potential

Bosman is hugely optimistic about this model. “Much of this land was lying fallow and generating no income for its owners who live off a government pension. However, with Afgri Farming’s involvement, many of them could receive a cheque at the end of the season that is two to four times their current annual earnings.”
The model has huge potential to empower the poorest and really embraces the concept of being broad-based. “It’s already changing lives – the owner can continue to work elsewhere if he is employed, while his land earns him a substantial income in his absence,” says Bosman.

Reaching the government’s target of redistributing 30% of farmland by 2014 is something everyone in agricultural needs to aim for. “This model shows that land under black ownership can be used to benefit the owner and the country as a whole,” says Bosman.

Transforming the land from 2t/ha yields to 7t/ha yields by using basic farming strategies such as ploughing up the hardened layer of topsoil is hugely rewarding, says Bosman. Although many farmers in the area treated the new model with suspicion at first, having seen numerous failed models, many have now embraced it. As a result, more offers of land continue to flood in.

However, as with farming in general, it’s not all plain sailing. A key challenge for Bosman is logistics. “The roads are in an appalling condition, severely affected by erosion and there’s been a complete lack of maintenance.”

A coal truck on its side after a bridge collapsed underneath it, is apparently a fairly common sight. Johan Booyens, project manager for Afgri Farming explains, “A 4 000ha site requires 400kg of fertiliser per hectare, totalling 1 600t. A fertiliser truck carries about 34t, which means the site needs 47 truck-loads of fertiliser. This doesn’t include chemicals, seed and diesel, as well as the maize which must be moved off the site.” When one remembers how remote the areas are and the often impassable conditions of the roads, as well as limited cellphone signal, managing the logistics is even more of a challenge.

So whose land is it, then?

Bosman explains that an additional challenge is that individual contracts must be signed with each landowner from tribal chiefs, private individuals, to trustees and government. “Getting contacts signed is one issue, but establishing exactly who owns a specific piece of land and who has the authority to sign the profit-sharing agreement is another exercise entirely,” says Bosman. At the KwaNdebele site, more than 50 different contracts had to be signed before farming could commence.

Despite all the challenges they have experienced and still need to tackle, Afgri Farming believes they are on the right track and that their model will be in operation for many years to come. The results speak for themselves.
For more information contact Robert Wesseloo at Afgri Farming on (012) 643 8091or e-mail [email protected] |fw