Markets for land reform beneficiaries

Too many once-successful farms now lie fallow, so it’s a breath of fresh air to hear of an initiative that seeks to prevent this from happening, says Lloyd Phillips.

Markets for land reform beneficiaries
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The first-ever fresh vegetable harvests from what is arguably the only business venture of its kind in South Africa were carried out in early December 2013. A tripartite partnership between government, a private sector company and land reform beneficiary communities in KwaZulu-Natal’s Abaqulusi Local Municipality (ALM), this initiative has the potential to create 2 000 direct jobs and support more than 15 000 dependants.

The drivers behind the partnership have been banker and retailer Lex Campbell and agriculturist and renowned rugby player and coach Dick Muir. Back in 2011, they decided to establish a fresh and frozen produce processing, marketing and distribution facility near the tiny town of Coronation in the ALM. “Our business is called Just Veggies. It processes and markets locally-grown fresh produce for national buyers as well as for export markets,” explains Lex.

In this way, it was hoped to empower these land beneficiary communities to generate a sustainable income for themselves as well as transfer farm management skills to them so that they could eventually run their farming businesses themselves.
Since 2012, Lex and Dick have met frequently with three land claimant communities that have, so far, expressed interest in the partnership. Initial meetings involved developing a business plan for the partnership with full input from each community’s trustees and grassroots members.

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“Among many other aspects, our joint business plan with each community looked at what each needed in terms of capital expenditure and operational expenditure to become productive fresh produce growers. They may have owned land, but these communities had nothing to farm it with,” recalls Lex.

He adds it was fortuitous that while these discussions were taking place, the department of rural development launched its Recapitalisation and Development Programme (Recap), which aims to get successfully claimed farms productive and sustainable again. Along with Lex and Dick, the Siyakhula Trust, comprising the Mbhudula Community Trust, Nkunzana Communal Property Trust and the Isingenge Communal Property Trust, set about sourcing funds for the development of commercial fresh produce production on the community farms from the Recap and KZN’s Agribusiness Development Agency.

Successful in their applications, the partners immediately set about getting the three community-owned farms, totalling 840ha, ready for fresh produce production. As joint CEOs of Just Veggies, Lex and Dick own 26% of the company’s shares, the Siyakhula Trust owns 15%, key strategic staff in Just Veggies own 14%, and the remainder of the staff own 4%. The final shareholder, with a 15% stake, is government’s Public Investment Corporation, the asset management company for the Government Employee Pension Fund.

The three communities, and any that might join the partnership in the future, will not only obtain income from jobs offered on the farms, but also from the payments made by Just Veggies for the fresh produce supplied, as well as any shareholder dividends. “The strategic partnership between Just Veggies, the communities and government has a big role to play in promoting Black Economic Empowerment, especially in this area. The Just Veggies owners are walking the talk,” says Louisa Nkosi, Just Veggies’ head of human resources.

“With the funding from government for developing the community farms, and with Just Veggies facilitating the fresh produce farming skills transfer to the communities, we’re hoping the communities will be skilled enough to fully run their own farming businesses within the next five years. And Just Veggies will continue buying their produce.”

‘Shadow’ farm managers selected by each community are being mentored ‘on the job’. It is envisaged that they will eventually have the skills and experience to single-handedly manage their community’s farm for the benefit of each community as a whole. One of the supporters of the partnership is McCain Foods, says Lex. He explains that McCain saw the partnership not only as an opportunity to increase its potato-supply footprint, but as a conduit to further enhance its own support of BEE initiatives.

“McCain was so impressed with what it saw was happening with the tripartite partnership that the contract for the communities to grow and supply potatoes to it was quickly concluded,” says Lex.

Important role
For strategic reasons, Just Veggies does not want to reveal how much fresh produce it is capable of processing. However, its state-of-the-art processing facility meets strict EU standards for food handling and processing. “Our concept isn’t perfect yet. But it’s being ironed out and improved on as time goes by,” says Lex. “There’s no question that agriculture can offer a huge part of the solution to the job creation that government is driving.

“We believe that our type of joint venture model has an important role to play in this job creation, and in skills transfer and rural development.”

Contact Just Veggies at 034 969 9022 or [email protected]. Website: