IDC to spend billions on developing SA agro-processing

South Africa’s Industrial Development Corporation (IDC) intends spending around R4,5 billion over the next five years to develop the country’s agro-processing sector.

It has already committed R800 million during its current financial year to create production capacity in more than 30 agro-processing companies. The IDC estimates this resulted in 3 700 new jobs.

According to Rian Coetzee, the IDC’s head of agro-industries, the R800 million investment was targeted at the fruit industry, dairy, starch production, protea cultivation, soya processing, sweet manufacturing, juicing and canning, ready-made meals, mushroom growing and processing, and sugar processing.

The Agricultural Business Chamber (ABC) said that it welcomes the IDC’s investment in the agro-processing industry, and is especially pleased that the majority of these investments are doing well and developing into profitable agribusinesses.

“This increased investment and financing in the broader sector now appears to be gaining momentum, which is good news for farmers, agribusiness, consumers and the country as a whole, as it will contribute to food security,” said the ABC’s CEO, Dr John Purchase. He added that he would like to see the IDC increase the scope of its focus to developing biofuels and other renewable energy projects in line with government’s New Growth Path.

National farmers union TAU SA said that it viewed the financing of agriculture, as indicated by the IDC’s agro-processing investment, as a crucial step towards ensuring the sustainability of a sector responsible for national food security. “In this regard the total food chain should benefit from such financial assistance, but the reality is that farmers find themselves in a position as price takers who are unable to add production costs to their product prices,” added TAU SA spokesperson Chris van Zyl.

The union would like to see greater support for primary producers and would not like to see the IDC become a “political tool financing Black Economic Empowerment enterprises that can’t contribute to production and sustainability in the sector,” said Van Zyl.

Meanwhile, the African Farmers’ Association of SA (Afasa) said the IDC needed to develop a partnership with black farmers so they could suggest where IDC funding is particularly needed for the development of SA’s agricultural value chain. Afasa president Mike Mlengana told Farmer’s Weekly that emerging farmers need basic training in all aspects of farming. Only then can they begin to define the value of their enterprise to potential customers.

“This process of partnership development lends itself to the identification of the necessary elements of the value chain, including agro-processing,” he said, adding that participation by all stakeholders in decision-making is crucial for the sustainable funding of projects. An Afasa meeting with the IDC’s Rian Coetzee is necessary and overdue, he said.