By Lloyd Phillips
A R31 million taxpayer-funded production support unit reportedly promises close on 2 000 smallholder sugarcane growers in far northern KwaZulu-Natal’s Jozini/Makhathini Flats district, a growing slice of the value-added industry cake.
South Africa’s approximately 24 000 smallholder sugarcane growers have long been recognised an essential pillar of the country’s approximately R25 billion a year primary sugarcane value chain. Although they reportedly collectively produce only 10% to 13% of the country’s total 18,3 million tons of sugarcane annually, it is still a substantial and materially and financially valuable 1,8 million to 2,4 million tons.
Unfortunately, owing to their deep-rural location, the approximately 1 240 of these smallholder sugarcane growers in KwaZulu-Natal’s Jozini/Makhathini Flats district struggle with many added challenges to the sustainable profitability of their production that collectively equates to about 242 000 tons of sugarcane annually.
To help address this, the national Department of Land Reform and Rural Development (DLRRD) recently handed over the infrastructure of a R31 million Farmer Production Support Unit (FPSU) to Jozini/Makhathini Flats’ smallholder sugarcane growers.
The department’s statement explains: “This infrastructure comprises a warehouse, administration block, storage, and training facilities. Through this, farmers will enjoy discounts through bulk procurement of inputs like fertilizer, diesel and chemicals to enhance their farming production, thereby bringing a much-needed economic boost for rural farmers within the uMkhanyakude District Municipality”.
The South African Farmers Development Association (SAFDA) represents the interests of thousands of the country’s smallholder sugarcane growers. In November 2018, it signed a service level agreement with what is now the DLRRD, for SAFDA to be an implementing agent of several of the department’s farmer support initiatives, including FPSUs.
Small Farms With Big Costs
“SAFDA is tasked with ensuring the optimum functioning of the FPSUs so that farmers benefit from the mechanisation and other services that are on offer,” says Dr Siyabonga Madlala, SAFDA’s executive chairperson.
He points out that smallholder sugarcane growers in Jozini/Makhathini Flats, and elsewhere, especially those in communal areas, struggle with various challenges. One of these is that, as individuals, they cannot benefit from economies of scale and, therefore, their production inputs are comparatively high-priced.
These farmers are also often far from the nearest sugar mill and so logistical planning and transport costs for their harvests are typically unfavourable.
Madlala adds that, furthermore, these farmers bear the negative impacts of poor coordination of support services between and within government departments.
“The primary challenge they face is lack of meaningful participation in the sugarcane value chain,” Madlala continues.
“The development of the Jozini/Makhathini Flats FPSU will serve as a springboard for coordinated development programmes that will provide opportunities for members of the wider community to benefit through improved agricultural production, increased household income, and general local economic development.”
This FPSU, and five others like it planned across KwaZulu-Natal’s and Mpumalanga’s sugarcane production regions, will enable the bulk-buying, storage and distribution of production inputs for sugarcane production. The relevant smallholder growers will access these at the resultant reduced and, therefore, more favourable costs.
Each FPSU is reportedly also a central hub for mechanisation services that each smallholder sugarcane grower can access for their production needs.
Fair Finance For Future Feasibility
According to Madlala, these smallholders also struggle to access loan facilities to cover their replant and ratoon management costs.
“To address this, SAFDA has created the accredited SAFDA Financial Services (SFS) entity that is an intermediary that has developed specific products to support these growers’ financial needs. SFS has accessed funding from government, the private sector, and development finance institutions, to provide these financial services.”
To enable deep-rural smallholder sugarcane growers to hopefully also benefit from the significant value-adding opportunities envisaged by the South African Sugarcane Value Chain Master Plan to 2030, SAFDA is motivating for “new multipurpose, integrated flexi complex facilities” to be strategically located throughout the country’s more isolated smallholder sugarcane production areas.
Madlala points out that the state has commissioned a bankable feasibility study in the Jozini/Makhathini Flats district for a prototype of such a facility.
“SAFDA awaits the completion of this study and believes that a new and efficient multi-purpose facility will be beneficial for smallholder sugarcane growers, the sugar industry and the country as it will allow product diversification and market opportunities, and socio-economic, agricultural and industrial growth.”
The sugarcane masterplan envisages diversifying from traditional sugar and molasses production into sustainable aviation fuels, bioethanol, and biorefined industrial chemicals.
