6 June 2023
A partnership between Exxaro Resources and FarmSol Holdings is demonstrating that mining and agriculture can work together to provide sustainable development while bridging the gap between smallholders and commercial farmers.
Collaboration and partnerships in the agricultural sector can lead to significant change and accelerate transformation and development. This is according to Aron Kole, FarmSol Holding’s Managing Director, at LSTL Trading and FarmSol’s recent harvest day in Carolina, Mpumalanga.
Although agriculture and mining are typically considered opposing industries when it comes to sustainability, partnerships like these prove the opposite, said Igna Dougal, the JSE-listed diversified miner Exxaro Resources’ Legal Asset and Property Manager. She explained that securing land is the biggest challenge for emerging farmers, and this often prevents them from accessing commercial financing. “It is only after you have secured tenure and addressed the land issue that you can unlock funding and other opportunities,” elaborated Igna.
Empowering farmers
David Lesesa, the owner of LTSL Trading, was among three farmers who were allocated land through three separate lease agreements by Exxaro Resources at its Strathrae properties in Carolina. He initially began farming near Piet Retief in 2009 through a cooperative. Due to infighting with other members, however, he left and got a catering contract at Exxaro Resources’ Strathrae Colliery canteen. “This is how I found out about the vacant land that Exxaro Resources owned,” he said.
David received just over 1 300 hectares, of which 1 100 are arable. The arable land is used to grow maize and soybeans, and the rest of the land is used to raise cattle. Because the land did not come with any financing, however, David could not secure any production loans, partly because he had neither collateral nor asset security.
After battling for a while, David eventually met with FarmSol Holdings, an implementing partner of South African Breweries (SAB). FarmSol offered him an unsecured production loan, along with a guaranteed market and mentorship.
Before meeting FarmSol, David produced maize on 50 hectares, turning over just about R400 000 a year. FarmSol helped him turn his luck and, since working with them in 2019, David farms on the entire 1 100 hectares, generating an impressive R8 million in turnover. His yield also increased from just under 5 tonnes per hectare to 9 tonnes per hectare. As part of this 1110-hectare farm, David grows 700 hectares of maize and soybeans for FarmSol, while 600 hectares are grown for open markets.
According to David, meeting these two companies changed the course of his life in ways he never could have imagined. He described the journey as long and filled with hardships, but he says he is a proud commercial farmer today as a result of this partnership.
Fostering successful partnerships
According to Igna, the partnership between FarmSol, Exxaro Resources, and LSTL is a good example of how like-minded individuals can overcome obstacles. Igna explained that Exxaro Resources’ investment in sustainable land use, such as agriculture, could ensure the company leaves a positive legacy for the communities it serves. “Due to the success of this project, we are looking to expand the program further. We are in discussions with other potential partners to open up more opportunities for farmers,” she said.
For partnerships to succeed, Aron added they must create shared value and be based on trust and transparency. He said FarmSol provided David with meaningful support by providing him with unsecured funding to achieve his farming dream. “His success was a result of our collaborative and transparent partnership. Our working relationship is built on trust,” Aron added.
Through this programme, David has direct access to the supply chains of SAB and Siqalo Foods. Aron said this enabled David to have his products in the production of famous beer brands and household food brands like Rama, Stork Margarine, and Rondo.
“To date, FarmSol has unlocked over R800 million in production loan funding to farmers in all nine provinces, covering 60 000 hectares of maize, barley, soya bean, oats, canola, groundnuts, wheat, and sunflowers. We have paid over R125 million in profits to smallholder and emerging farmers participating in our programmes,” said Aron.
