11 January 2024
Inala, a farm that was an eyesore not long ago, is gradually being revived. This is due to efforts of the Matsamo Communal Property Association (CPA), which has earned praise for being among the few able to run land reform projects successfully.
If you had seen Inala six months ago, the state of the Mpumalanga farm could have driven you to despair. Banana, mango and litchi orchards and sugar cane plantations on the 1 300-hectare property had died from neglect.
Visit the farm today, however, and you will see signs of its former glory a decade ago, when it exported products to European and Middle East countries.
Matsamo CPA has cleared 300ha for sugar cane and papaya and so far, and 131ha of sugar cane has been planted as part of a R25 million investment the CPA has undertaken with a strategic partner.
Inala, south-east of Malelane in Nkomazi Local Municipality, went into decline just after the Department of Land Reform and Rural Development bought a 25% stake for labourers and another 25% for itself in 1996. It eventually went bankrupt.
The labourers pooled their land acquisition grants of R16,1 million each to buy their stake in Inala Farming Company. But it was an ill-fated project from the outset because Matsamo CPA had lodged a restitution claim encompassing Inala and other farms in the area. The department bought the land back when it was liquidated.
Other than Inala, Matsamo CPA is a beneficiary of prime agricultural land worth more than R800 million and grows mangoes, litchis, oranges, grapefruit, sugar cane and pawpaws at a commercial scale.
Last July, Deputy President Paul Mashatile visited the Matsamo projects and said the government would use them as a blueprint for all land reform projects.
More than 70% of land reform projects, covering about 9 million hectares, have become unproductive for various reasons, such as squabbles among beneficiaries and a lack of funding and skills.
“From government’s side, we want to see what they are doing and learn from their experiences because we want to replicate this throughout the country,” said Mashatile. “We have realised that in land restitution and redistribution projects, when people acquire the land they do not use it productively. Matsamo is an example of what needs to be done.”
Matsamo CPA acting chairperson Mduduzi Shabangu said the CPA had run its projects without government funding. “We have managed to come up with models to run our businesses even though we lack in finances,” he said.
The models include leasing acquired land to established agricultural companies to earn income, entering joint venture deals with previous landowners and using profits from the leased land to run some of the CPA’s farms.
Over the past decade, the CPA has paid R8 million in annual dividends to beneficiary families, as well as offering bursaries and donating to public institutions for renovations.
Strategic partnerships
Mbuso Thumbathi, CEO of Phahlane AgriSolutions, an agricultural professional, accounting and consulting services company, said the good performance of Matsamo CPA and its strategic partners was evidence of the amount of work that had been done.
“We have always argued that investment requires forward-looking leadership and a stable environment,” he said. “Partnerships between strategic partners/investors and landowners on land reform projects are encouraged. It is also important to pair commercial farmers with small-scale and land reform projects. All that must be done is alignment of values and clear conditions.”
Mashatile’s visit to Nkomazi followed Matsamo CPA’s successes at the Tomahawk and Laughing Waterfall estates.
Tomahawk is run as a joint venture, and in addition to being South Africa’s largest producer of litchis it grows citrus on 700ha, bananas (310ha), mangoes (200ha), papayas (30ha) and sugar cane (616ha). Matsamo Tomahawk JV exports to Russia, Canada, China, Singapore, other parts of Europe and the Middle East.
The CPA has a 50% shareholding in Matsamo Tomahawk JV. “We did not have the money to buy shares, so we brought our land and leased it to the company. The money we get for the lease pays for our share in the company,” Shabangu said.
However, the CPA runs Laughing Waterfall banana estate on its own. It developed the estate with R5 million raised from leasing other farms. Laughing Waterfall is a pilot for the Matsamo CPA because it aims to eventually run all its projects on its own when joint venture contracts expire.
Matsamo CPA’s entrepreneurial spirit
Inala also operates in a joint venture arrangement and Guy McCormack, a director of Matsamo Tomahawk JV, said the entrepreneurial spirit of CPA members had been a blessing to the joint venture and the ambition for Inala was to replicate Tomahawk’s success.
“The reasons for the success have been our relationship with the Matsamo community. A fractured relationship does not attract investment. As investors, we need a stable environment to invest,” McCormack said.
The stability had emboldened Tomahawk to make further investments, including a R62 million state-of-the-art packhouse with capacity to store 400 000 tonnes of fruit. “This packhouse will enable us to expand our citrus area and employ more people than the 2 000 we currently employ,” said McCormack.
