Jobs Fund: Open high-value opportunities to smallholders

Guarantee mechanisms: Following the successful implementation of the Sugarcane Development Initiative, a 2014 partnership between the Jobs Fund, Tongaat Hulett and farming communities in three districts of KwaZulu-Natal, this public-private partnership has so far resulted in an injection of over R80 million in rental income to these farming communities. Photo: Supplied/Food For Mzansi

Following the successful implementation of the Sugarcane Development Initiative, a 2014 partnership between the Jobs Fund, Tongaat Hulett and farming communities in three districts of KwaZulu-Natal, this public-private partnership has so far resulted in an injection of over R80 million in rental income to these farming communities. Photo: Supplied/Food For Mzansi

Developing a sustainable agriculture sector means growing both the farm and the farmer, writes head of the Jobs Fund Najwah Allie-Edries, the same level of effort put into the crops must also be put into the farmer and their business.

Despite the impact of Covid-19, the agriculture sector has the potential to create jobs at scale for South Africa’s low and semi-skilled workers and thereby contribute to inclusive economic growth.

Key government policy documents such as the National Development Plan and the National Growth Path position the sector as central to government’s plans to promote rural development, food security and combat rural poverty, with smallholder and new era farmers central to these plans. 

More recently, agriculture has also been identified as a critical sector to be strengthened in the South African Economic Reconstruction and Recovery Plan, as tabled by Pres. Cyril Ramaphosa in parliament in October 2020. 

The President’s push to reduce imports and boost local production has already seen some successes in the poultry and sugar industries. It is also well timed with the Agricultural Business Chamber’s forecasted growth in the agriculture export market following a stellar performance in 2020, with a 3% increase from 2019. 

Optimism extends beyond the next financial year with one of the Jobs Fund’s partners, the Citrus Growers Association, indicating that export volumes are expected to increase from the current 146 million cartons (15kg equivalent cartons) to around 230 million cartons by 2031.  

ALSO READ: Agriculture ‘could pull Mzansi through tough 2021’

Bridging the capacity gap

In spite of significant growth potential in the sector, opportunities and benefits are not widespread. The sector is characterised by a huge capacity gap between commercial and smallholder or emerging farmers, placing the latter in a disadvantageous position in terms of accessing opportunities, markets and value chains. 

Traditional value and supply chains largely exclude smallholder producers and cooperative groupings (key producers) from opportunities further up the agriculture value chain i.e. processing, packaging and other value-add activities. 

The country’s agriculture and agro-processing value chains are ripe for transformation.

Raymond Koopstad is the owner of La Vouere in the Ceres valley, Western Cape. As part of a collaboration with the Deciduous Fruit Development Chamber, the Jobs Fund supported the farm’s commercialisation with nectarine trees, soil preparation and infrastructure. Photo: Supplied

Robust and localised agriculture and agro-processing systems are crucial for food security, catalysing economic diversification and, of course, creating jobs.

When we look at South Africa’s development trajectory for agriculture, some successes have been documented. However, there are still many challenges that hamper sustained growth and transformation.

These include, amongst others, access to land and water, misalignment of government policy and programme implementation, lack of investment in required infrastructure, the continued marginalisation of women, lack of access to markets and finance, and slow roll-out of productive land reform.

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The role of the Jobs Fund 

Within this context, the Jobs Fund has invested significantly in testing sustainable agricultural models, with more than 30% of its portfolio of projects implementing within this sector.

The Jobs Fund interventions primarily focus on reducing barriers to entry for smallholder and emerging farmers and addressing specific challenges that hamper their ability to grow sustainably (for example: technical skills development, access to finance and markets, business management skills development, inclusion in mainstream value chains, etc.).

Through the implementation of its portfolio, the Fund has documented many lessons and good practice, drawn both from project model successes and project model challenges.

“…smallholders seeking to supply retailers with produce often lack collateral to raise funding to expand their businesses to include agro-processing…”

Developing a sustainable agriculture sector means growing both the farm and the farmer, and expanding the opportunities available to them. It can’t be one or the other; the same level of effort put into crop development must also be put into the farmer and his or her business.

Creating a viable agriculture sector requires a long-term view and a holistic approach. There are no quick fixes and government, private sector, farmers and development practitioners must recognise and acknowledge that agriculture programmes and projects are long-term interventions. 

Some crops take a significant time to establish (e.g. orchards), as does the farmer’s development, (e.g. the development of technical and business skills). Business support and mentorship must therefore be tailored to the needs of the farmer and his or her business enterprise. 

Changing the narrative 

There is a role for small and medium-sized producers in high-value markets, but they need the right type of support that will allow them to flourish, access markets and compete with commercial players. 

Contrary to the current narrative, landownership, while important, is not as significant a barrier as is long term access to land and appropriately structured finance. We require a more nuanced approach if we are to move the needle in the right direction. 

The Edamame Development Program grows soybeans an is managed by Newlands Mashu Community Development Centre, a Durban based non-profit organisation, and supported by the Jobs Fund. Photo: Supplied

Through the implementation of its agriculture portfolio, the Jobs Fund has explored the complexity and technical requirements of sustainable agriculture interventions, identifying the support required at every phase of the farming life-cycle.  

Smallholder farmers cannot be regarded as a homogenous group, any intervention must be preceded by a thorough needs analysis of both farmer and farm. Where there is communal farming, engagement with the community is critical. The outcome should be a comprehensive farm plan. 

Often a key challenge for the vast majority of smallholders is their ability to access markets competitively and build sustainable partnerships. This is a critical element of smallholder support programmes. Access to farming inputs and access to markets go hand in hand.

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Farmer development

An example of a project that has embedded this in its development model is the Sernick Emerging Farmers Programme, a partnership between the Jobs Fund and the Sernick Group. The objective of the intervention is to create sustainable farming enterprises connected to the upstream and downstream beef value chain.

Sernick does this through capacitating emerging farmers with both SETA accredited and on-the-farm training as well as providing the farmers with cattle stock, infrastructure, and supply opportunities through Sernick’s value chain. 

“The country’s agriculture and agro-processing value chains are ripe for transformation.”

As of 31 March 2021, Sernick has recruited and capacitated 662 farmers, 56 of whom graduated into the Fully Integrated Emerging Farmers Programme (FIEFP). The FIEFP aims to transform beneficiary farming enterprises into viable commercial entities with their own productive capacity. 

Sernick will then select the best of the FIEFP farmers to become beneficiaries from the Farmers Development Trust, which has a 70% shareholding in Temong (Pty) Ltd, which owns 26% of Sernick Abattoir (Pty) Ltd.

The remaining FIEFP farmers will benefit from the skills and value chain connections gained during the programme and will service markets in their areas.

Opportunities for smallholders lie in both existing and new value chains. The Jobs Fund’s support of the Newlands Mashu Community Development Centre’s Edamame Soybean Industry project saw the establishment of an edamame soybean industry in South Africa.

This while improving household food security and providing 83 emerging farmers and 256 small-scale growers access to economic opportunities in the area. The approval of its 2015 export registration opened the door to capitalise on the existing local success and seek further opportunities internationally.

This project’s successes are largely due to its design around the planned beneficiation of farmers, attractive farm-gate value of the crop and vertical integration. 

New era cattle farmers like Zacharia Matli get a leg up towards commercialisation through the Jobs Fund-supported Sernick Emerging Farmers Programme. Photo: Supplied

It may not be a secret that the bulk of income potential is in value-added agriculture rather than primary production, but smallholders seeking to supply retailers with produce often lack collateral to raise funding to expand their businesses to include agro-processing and also struggle to meet food safety requirements.

Previously disadvantaged smallholders in South Africa also lack logistics infrastructure, especially the pack houses required by legislation.

The fundamentals of agri development partnerships 

The Jobs Fund, working with the Pick n Pay Foundation in partnership with the SAB Foundation, is supporting five previously disadvantaged and marginalised emerging farming operations to become sustainable commercial agricultural businesses with firm off-take agreements with Pick n Pay.

The overall aim is to eventually scale this project across South Africa. 

The three partnerships discussed highlight the agricultural sector’s broad and largely untapped potential to develop solid smallholder operations, create jobs, and build sustainable livelihoods amongst South Africa’s largely marginalised rural communities.

They represent practical and achievable routes to broader inclusion by leveraging partnerships with existing mainstream expertise and assets. 

So what are some of the fundamental elements required in agriculture development programmes? 

Appropriate and reliable monitoring and feedback systems need to be built in at the conceptual design phase of the intervention. This enables the project to course correct when needed. It also assists with building and documenting a credible performance track record.

Capital deployment must be patient and appropriately structured and it must be accompanied with tailormade support that covers a range of issues including technical support, business development support and access to markets. 

Building the capability of smallholder and emerging farmers must move beyond the debate about land ownership, the imperative now is to find creative solutions to long term access to land and at the same time providing appropriate support to secure and build a sustainable smallholder, emerging farmer capability. 

ALSO READ: AgriSETA partnerships can create jobs in sugar cane, citrus

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