Small sugar farmers go commercial

A sugar company in Mpumalanga is helping small scale farmers who produce sugar to make the jump to commercial farming.

During the past production year, Mrs Lina Mabaso from Kaapmuiden have achieved a crop of 181 tons of sugar cane per hectare on her new farm. For her and six other small scale cane growers, the term "sugar cane farming" suddenly has new meaning. Following a dismal existence on a small patch of land, she now has the expectation to be regarded as a full commercial farmer.

This happened thanks to a project started in 2003 by Tsb Sugar (previously Transvaal Sugar Limited).

An insolvent farm of 261 hectares, on which sugar, citrus and vegetables were grown, was bought by the company and redeveloped in its entirety. With help amounting to more than R15 million from the department of land affairs, drip irrigation systems were installed on most of the farm, and new lands of sugar cane were planted.

During the development process, seven suitable candidates were chosen from 1 300 applications by small scale growers and employees of the company. A proven record of high production was one of the prerequisites. Of the two women and five men finally chosen, only one was a company employee.

Together, these seven founded an independent company called Siyathuthuka. That company is in the process of buying the farm from Tsb Sugar. Each farmer manages a portion of the farm (of between 35 and 40 hectares) for his or her own gain, and is responsible for paying off a portion of the loan. The loan amount is between R1,4 million and R2,6 million, depending on the size of the farmer's land. According to Mr Martin Slabbert, executive manager for sugar cane supply at Tsb Sugar, the only help they received was a grant of R3,3 million from the department of land affairs.

"From day one, our policy was not to spoonfeed them. It is important that they become self-sufficient and farm sustainably. For this reason, the only thing we provide, is advice," said Slabbert.

Before officially taking over on 31 March last year, the farmers completed a management course and a full course in irrigation scheduling and the maintenance of irrigation systems. Other support they received, included advice on administering fertiliser, weed and pest control, production planning, bookkeeping and financial planning.

"The goal is to have the farm's debt paid off in 15 years. Thanks to the excellent crop they achieved, the fact that the drought seem to have finally broken, and the favourable price of sugar internationally, they may actually do it a lot quicker," said Slabbert.

Mr Eric Sibiya, chairperson of Siyathuthuka, said that he is determined to pay off his debt within six to ten years.

The group's first crop had an average sugar cane yield of 135 tons per hectare. The average for the region is 90 tons per hectare. The other woman in the group, Ms Nellie Ngomane, achieved 161 tons per hectare. These women boast a recoverable value of more than 13%.

Slabbert pointed out that these figures can be misleading since more than one production year's growth were present on the fields, and because new fields usually yield a better initial crop. "We are confident nonetheless that they did very well, especially since the drought had still played a role last year."

Other improvements on the farm include nine houses, a police office and several barns. The owners live in seven of the houses, and the rest is being let. A body corporate founded by them is responsible for managing the joint assets such as buildings, water pumps, roads and border fences, from a levy paid by each member. The cane is cut and transported to the sugar mills using contract labour.

"Although I have had more than ten years' experience in sugar cane farming, I have learnt quite a lot over the past year. There are still challenges to meet and new technology to get the hang of, but I'm confident that I will be successful," said Sibiya, who also tills the land on his little farm in the trust area. "The most important thing is to work hard and first pay of all debt."

According to Mr Hennie Snyman, chief executive of Tsb Sugar, his company's philosophy is to ensure that sufficient quantities of sugar cane is grown. For this reason he first invests in the training of growers, to ensure the best production.

Roughly 20% of Tsb Sugar's cane is provided by small scale farmers. Almost 40% of the cane at Komati sugar mills is provided by small farmers who farm within 30 km of the mills.

"We have an irrevocable belief in the potential of our black cane workers. Around 1 300 small farmers supply us with cane. If we had enough land and money available, we would have loved to turn every one of them into commercial farmers. None of them stand down to any other cane farmer," Snyman said.

According to Mr Dawie van Rooy, director of cane and sugar production at Tsb Sugar, a second project is underway in which 13 growers of medium capacity will be settled on a farm of 520 hectares, but the transaction is still to be concluded.

"The ultimate goal is to settle 50 growers of medium capacity on 2 000 hectares of land. Unfortunately, very few farms are suitable for this type of development, and the fact that certain areas are subject to land claims, further complicates matters."

Employees also benefit. Some 46 employees of Tsb Sugar and 373 other beneficiaries enjoy the fruits of a 2002 land reform and development project by the company.

In the Nkomzi region, the farm Vorem was bought by 419 beneficiaries for R42 million. The farm had 925 hectares of cane and 22 hectares of citrus on it. Grants by the department of land affairs' programme Land Redistribution for Agricultural Purposes (LRAD) as well as a loan from the Land Bank helped make the transaction possible.

According to Dr Hans Balyamujura, chief manager of agriculture at Tsb Sugar, the farm's production capacity in 2003 were a mere 60 tons of sugar cane per hectare. A Hire purchase agreement between the owners and Tsb Sugar was signed so that the farm could be developed to its full potential. The company provided R12 million for the improvement of irrigation systems and planting new lands of cane.

"We were sure that Vorem had the potential to produce 118 tons per hectare. In fact, in the previous production year we had already achieved 80 tons per hectare, despite the then prevailing drought conditions. The South African sugar industry's average is 94 tons per hectare, which should yield a net profit of R2 358 per hectare. If Vorem could yield 118 tons per hectare, the profit would be R3 560 per hectare.

The beneficiaries' business is managed by their own company, Blue Cloud. In total, 39 of the 46 Tsb beneficiaries live on the farm. Of the 373 other beneficiaries, 32 live on the farm.

"Everyone benefits from this project. The department of land affairs regards this as a successful reform project. The Land Bank regards it as a safe investment. Tsb Sugar not only gets the opportunity to participate in land reforms, but also to ensure the largest cane supply possible. For the collective owners, this is an excellent investment and source of income. Even for those who work on the farm, the project is a refuge and an opportunity to learn all about the industry," said Balyamujura. - Nico van Burick

Article courtesy of Landbouweekblad.

For more information on agricultural property matters, visit www.agritv.co.za.