ROADMAP TOWARDS 

SMALL-SCALE GROWER SUSTAINABILITY

Sfiso Mnguni

Sfiso Mnguni is Grower Sustainability Manager at SA Canegrowers’ Association.


Since its dedicated focus on grower sustainability four years ago, Canegrowers’ Association has been confronting issues affecting small-scale sugarcane growers head-on.


While most development and sustainability interventions across agricultural commodities tend to focus on developing and providing agronomic support through agronomic training and extension services, there is growing evidence suggesting that often when group-based small-scale agricultural work fails, the reason has more to do with the human aspect of business leadership and management capabilities than technical agronomic abilities of farmers.

Based on this realisation, all practical Association’s interaction with small-scale growers (SSGs) has evolved around its Cooperatives Support Programme, implementation of which has seen several pockets of the programme being delivered, forming what can be regarded as the Roadmap Towards Small-Scale Grower Sustainability.


Dealing with social issues

2013 and 2014 focused on facilitating multi-stakeholder processes which had been brought in as part of continuous professional development facilitated by the Netherlands Wageningen University’s Nuffic Programme for Canegrowers staff. The programme equipped Canegrowers field team with a set of tools and competencies, which allowed us to go out and help growers deal with their social issues of leadership quarrels and conflict of interest, which for a long time had tended to undermine efforts to focus on the business of growing sugarcane. Targeted hotspot mill areas at the start of intervention included Maidstone, Makhathini, Umfolozi and Noodsberg. Today one can ask when last did we hear of social issues and leadership squabbles in these areas. Some isolated incidents of grower differences where attention is still needed are however still observed in areas such as Pongola.  


Socio-economic investigations

The significance of conducting an investigation into the status of cooperatives in the industry is that the results provide the basis for subsequent programming of support interventions. The 2014 baseline survey revealed a number of areas needing attention. Non-compliance with the cooperatives legislation, tax and tax returns, CIPC reporting and returns, annual audit requirements, keeping updated lists of members and most of basic governance and management practices not being observed by most cooperatives were some of the findings.  It is on the basis of these findings therefore that leadership, good government and management interventions were prioritised for the interventions that followed shortly after concluding the baseline survey. 


Enhancing good governance and leadership capabilities

Ultimately, the success and failure of any business lies in the capabilities of its leaders – those who set the business agenda and make decisions. For some long time, small-scale growers’ agendas have been subjected to a cloud of social issues and less business items. This has been one of the most contributing factors in SSGs’ lack of progress in tackling real business issues. 

The SSGs Good Governance and Leadership Conference held in Mkhuze in September 2015 provided a platform for grower leaders to engage and acknowledge their leadership inadequacies and agreed on a set of resolutions for good governance and leadership. These resolutions were adopted and are being observed till today.   


Enhancing good business practice in management, statutory compliance and record keeping

Between February and March 2016, more than 300 representatives of SSGs participated in the Cooperatives Management Seminar, which was held in three clusters to cover all mill areas. The seminar took growers with the importance and the ‘how to do’ of record keeping, filing, legislative compliance, tax and annual tax returns as well as annual CIPC returns. A recent snap evaluation exercise indicated that there is some significant improvement in management and record keeping practices in Malelane and Komati as performance ranges between 73% and 84% in terms of scoring. This evaluation is currently being undertaken by grower support officers in all mill areas. The results will enable us to categorise and rate all co-operatives performance levels in 3 categories, namely top performers, low and non-performers. 




RESULTS OF THE SSG COST SURVEY




Enhancing profitability and livelihoods  

It is common knowledge that due to their land size, small scale growers cannot be expected to generate enough income to sustain their families’ livelihoods through cane alone. The diversification concept was introduced and pursued from the premise that farmers have always sought alternative livelihood activities that help sustain continuous cash flow while in their farming business.

For purposes of Cane Growers Support to SSGs, diversification is defined and understood as the process where farmers seek alternative income, other than growing conventional one crop. Context was set to look at diversification beyond mere crop mixing or crop rotation, and even beyond agriculture, but diversification of income streams, by doing multiple businesses. This diversification initiative is about identifying and pursuing other business opportunities which can help SSGs earn additional income to that of cane. It is not meant to replace sugarcane with any other business, but to supplement cane income. The team of regional economic advisors are in the process of finalising business plans for each of the ten projects, seeking for R39 million funding. 


While most development and sustainability interventions across agricultural commodities tend to focus on developing and providing agronomic support through agronomic training and extension services, there is growing evidence suggesting that often when group-based small-scale agricultural work fails, the reason has more to do with the human aspect of business leadership and management capabilities than technical agronomic abilities of farmers.

Based on this realisation, all practical Association’s interaction with small-scale growers (SSGs) has evolved around its Cooperatives Support Programme, implementation of which has seen several pockets of the programme being delivered, forming what can be regarded as the Roadmap Towards Small-Scale Grower Sustainability.


Dealing with social issues

2013 and 2014 focused on facilitating multi-stakeholder processes which had been brought in as part of continuous professional development facilitated by the Netherlands Wageningen University’s Nuffic Programme for Canegrowers staff. The programme equipped Canegrowers field team with a set of tools and competencies, which allowed us to go out and help growers deal with their social issues of leadership quarrels and conflict of interest, which for a long time had tended to undermine efforts to focus on the business of growing sugarcane. Targeted hotspot mill areas at the start of intervention included Maidstone, Makhathini, Umfolozi and Noodsberg. Today one can ask when last did we hear of social issues and leadership squabbles in these areas. Some isolated incidents of grower differences where attention is still needed are however still observed in areas such as Pongola.  


Socio-economic investigations

The significance of conducting an investigation into the status of cooperatives in the industry is that the results provide the basis for subsequent programming of support interventions. The 2014 baseline survey revealed a number of areas needing attention. Non-compliance with the cooperatives legislation, tax and tax returns, CIPC reporting and returns, annual audit requirements, keeping updated lists of members and most of basic governance and management practices not being observed by most cooperatives were some of the findings.  It is on the basis of these findings therefore that leadership, good government and management interventions were prioritised for the interventions that followed shortly after concluding the baseline survey. 


Enhancing good governance and leadership capabilities

Ultimately, the success and failure of any business lies in the capabilities of its leaders – those who set the business agenda and make decisions. For some long time, small-scale growers’ agendas have been subjected to a cloud of social issues and less business items. This has been one of the most contributing factors in SSGs’ lack of progress in tackling real business issues. 


The SSGs Good Governance and Leadership Conference held in Mkhuze in September 2015 provided a platform for grower leaders to engage and acknowledge their leadership inadequacies and agreed on a set of resolutions for good governance and leadership. These resolutions were adopted and are being observed till today.   



                     


Enhancing good business practice in management, statutory compliance and record keeping

Between February and March 2016, more than 300 representatives of SSGs participated in the Cooperatives Management Seminar, which was held in three clusters to cover all mill areas. The seminar took growers with the importance and the ‘how to do’ of record keeping, filing, legislative compliance, tax and annual tax returns as well as annual CIPC returns. A recent snap evaluation exercise indicated that there is some significant improvement in management and record keeping practices in Malelane and Komati as performance ranges between 73% and 84% in terms of scoring. This evaluation is currently being undertaken by grower support officers in all mill areas. The results will enable us to categorise and rate all co-operatives performance levels in 3 categories, namely top performers, low and non-performers. 


Enhancing profitability and livelihoods  

It is common knowledge that due to their land size, small scale growers cannot be expected to generate enough income to sustain their families’ livelihoods through cane alone. The diversification concept was introduced and pursued from the premise that farmers have always sought alternative livelihood activities that help sustain continuous cash flow while in their farming business.

For purposes of Cane Growers Support to SSGs, diversification is defined and understood as the process where farmers seek alternative income, other than growing conventional one crop. Context was set to look at diversification beyond mere crop mixing or crop rotation, and even beyond agriculture, but diversification of income streams, by doing multiple businesses. This diversification initiative is about identifying and pursuing other business opportunities which can help SSGs earn additional income to that of cane. It is not meant to replace sugarcane with any other business, but to supplement cane income. The team of regional economic advisors are in the process of finalising business plans for each of the ten projects, seeking for R39 million funding. 


Cooperatising the SSG sector

Small-scale sugarcane growers have always seen the benefit of farming together as means to mitigate profitability problems relating to cost of production, economies of scale, farming skills shortage and resource sharing. Since the promotion of the cooperatives idea by the South African government in early 2000s, small-scale sugarcane growers have been organising themselves into formal legal entities of cooperatives. Government’s persistence in doing business with small-scale farmers in consolidated settings across agricultural commodities calls for us in the sugar industry to become more serious in our support to small-scale grower cooperatives.


Canegrowers field teams in various mill areas are currently assisting with establishment of mill area based secondary co-operatives. By the end of the year 2017, we are looking at having fourteen secondary cooperatives representative of all primary cooperatives in their respective mill areas. The cooperatisation initiative is envisaged to culminate, at the end of 2018, with the establishment of a tertiary level federation of all small-scale sugarcane grower cooperatives. 

The ultimate objective is to build permanent and sound multi-level business entities of small-scale growers in the form of primary, secondary and tertiary small scale grower cooperatives, which will enable SSGs to do business at the highest possible level within the sugar industry.  


Contractor programme

Results of the SSG Cost Survey reveal that majority of SSG costs (25.4%) are attributed to transport and haulage – field to zone, zone to mill. Harvesting, planting and weeding together amount to 30.4%. These represent the services that SSGs often get from cane contractors.


While Canegrowers does issue guiding contracting rates from time to time, it is common practice that contractors do not comply with these rates. Many times, to the extent that prices amount to double the set Canegrowers rates. Unless there is some form of regulatory measures agreed upon between growers and contractors, there will always be room for pricing exorbitance and all the growers’ effort will always benefit the contractor. 


This year 2017, Canegrowers is set to facilitate the Cane Contracting Indaba, which is envisaged to result in some agreed upon mutually benefiting measures between growers and contractors.










arrow_upward