As part of transforming the sugar industry, black small-scale sugarcane farmers have now been elevated to meaningful participation in the value chain by becoming owners of their own fertiliser plant!
This has been possible by the South African Farmers Development Association (SAFDA), which is changing the landscape of the country’s industry to make it more inclusive and representative. This development is a big step on the transformation journey… this is the first black-owned granular fertiliser plant in South Africa. Farmers will now be buying from themselves at a lower price.
This is as the result of the R28 million partnership between SAFDA and Mintirho Foundation. When the Mintirho Foundation first put out its call for proposals (which was directed at assisting sugarcane farmers), SAFDA quickly realised that the majority of its members would not individually be able to meet the stringent application requirements of the foundation for various reasons. This would mean the foundation would not have the intended effect, so SAFDA decided to reach out initially to Coca Cola Beverages South Africa (CCBSA) and in turn the foundation. CCBSA quickly recognised that this could be a mutually beneficial relationship, SAFDA representing the poorest of the poor in rural areas and CCBSA brand being able to fulfil its promises of enterprise development and touching a broad audience.
SAFDA had identified two of the biggest cost drivers for small-scale and land reform farmers as the cost of fertilisers and that of transport costs. It is also two areas where there is limited if any participation in these parts of the value chain by black farmers. Small-scale growers (SSGs) are particularly susceptible to exploitation by contractors who hide behind the fact that these growers are far from the mills through no fault of their own. They also lack economies of scale and therefore pay higher prices for all inputs including fertiliser. It made sense that if SAFDA was to assist these growers then they must bring down the costs of inputs, hence the rationale behind purchasing the plant and addressing the logistics issue, through the purchase of trucks.
Black sugarcane farmers will be the biggest beneficiaries with a specific focus on SSGs and those black growers furthest from the mills. The number of small-scale farmers has been steadily declining from 50000 in early 2000s to below 20000 in 2018. This in essence means that rural households that used to earn income from sugarcane no longer enjoy this benefit. This problem is compounded by the fact most SSGs farm on communal land and therefore cannot sell the land they once tilled. This has meant mass migration to cities and has put immense pressure on those cities’ infrastructure. The sustainability of the small-scale growers is thus of immense importance not only to the rural economy but to the urban economies as well. The sugar sector has seen major job losses and it is hoped that these interventions will stem future job losses. Increased yields and more land coming back into production should also see more jobs created.