Farmer profile: Growing beyond land reform in South Africa


By Nan Smith | 12 June 2018
farm
Cows graze the plains of Carnarvon against a backdrop of sharply rising hills. “There are 2 very different ecosystems here,” says Aggrey Mahanjana. “The hills and ridges are game habitat, the plains are for the cattle.” Photo: Nan Smith

Aggrey Mahanjana’s farm, Carnarvon Estates, is a rancher’s dream north of Queenstown in South Africa’s Eastern Cape Province. Aggrey engages with the country’s Land Reform Programme by working towards commercial-scale production.

Carnarvon Estates is set in a vast landscape of rolling grasslands and the high, rocky ridges of the Stormberg. Fed by summer rain and winter snow, springs rise from these hills supplying perennial water to the plains below.

FARM HISTORY AND TRANSITION

In 2006, the SA government bought Carnarvon Estates, a 5 000 ha farm, under the Proactive Land Acquisition Strategy (Plas), a land reform initiative focused on buying high potential agricultural land to benefit farm workers. The government purchased the land from the Halse family, who had farmed it for 153 years.

In 2009 the Chris Hani Regional Department of Land Reform approached Aggrey and asked him if he would be prepared to take over the farming operation.

“They recruited me because they thought I had the resources to operate the farm and because of my agricultural background,” says Aggrey. “As a trained agriculturalist I know what is needed which made me wary of ‘getting a farm’. Many black people are understandably excited by the thought of owning and farming land, but they don’t know, or they underestimate, what it takes to farm.”

Before he took over in October 2009, Aggrey interviewed every member of the 23-man farm worker team. “I asked each one of them if they wanted to run the farm.”

Almost to a man the Carnarvon people were clear that their priority was a secure monthly income rather than farm ownership. Aggrey saw this as a critical starting point.

INITIAL INVESTMENT

At its inception, Plas acquired only land rather than a functioning farm. The moveable assets and most of the animals had been sold at auction in early 2009. Aggrey bought the remaining machinery and implements, 60 dairy cows and 60 Shorthorn beef cattle that had not been sold because of their poor condition. He balked at paying the R2 million asking price for the estate’s game, which he said he could not count.

Until his arrival, the local Sterkstroom municipality paid Carnarvon Estates an annual R1.2 million for water, abstracted from a well-supplied farm dam. “The day I came here I was told that water was a national asset and the municipality would no longer pay to take it off the farm.”

Then, a few weeks before his tenancy began, a fire destroyed almost 75% of the grazing and fencing. It was a hard start for Aggrey by any standards.

RECAPITALISATION

A run-down farm needs a cash injection to get going. Aggrey began by erecting a guarding house at the entrance to help control pedestrian and vehicular traffic through the farm.

His reasons for restoring an original wattle-and-daub building, built in 1855, were twofold – he needed an office and he resonated with the historical significance of the building. “It’s too easy never to stop working when you’re farming. A proper office makes it easier to put management systems in place,” he explains.

The farmhouse roof needed fixing and fences had to be erected to replace those destroyed in the fire. He renovated staff housing, resurfaced and rehabilitated farm roads, built a training facility for local farmers and a shed for farm machinery and implements, bought a new pump, repaired old pumps and put permanent water points into dry camps.

More cash was needed for an upgrade of the hunting lodge, a place with a jaw-droppingly beautiful view and the somewhat extraordinary name of “The Stagger Inn”.

Aggrey has renovated and refurbished the old hunting lodge at Carnarvon. Hunting provides a useful, additional income stream for the business. Photo: Nan Smith

The improvements and upgrades to farm infrastructure cost a considerable amount of money. “I have invested more than R18 million in farm infrastructure and have loan accounts with various financial institutions. There is no indication as to when government will pay me back or recapitalise the farm,” says Aggrey.

But waiting for the state to come up with money was not an option for him, as he says: “If I had waited for government, Carnarvon would have been counted among the failed land reform farms. As a leader of smallholder farmers in South Africa, I was determined to be a good example and so I could not allow that.”

At the same time, Aggrey is expected to pay the state an annual rent for the land, calculated as a percentage of the selling price of the farm.

Veld loses nutrient value quite quickly in an area where the first frosts arrive in mid-April. During the long, harsh winter supplementary feeding becomes necessary. This 28 ha block of maize is part of the winter forage flow plan. Photo: Nan Smith

Aggrey’s wife, Angel, an accountant, questioned his wisdom, and later his sanity, as she watched money flow into a venture that seemed to have much in common with a black hole. But Aggrey is a determined and patient man. He persevered. Every second weekend he commutes from Gauteng to the Eastern Cape.

After a bad run with a series of unsuccessful managers, he persuaded his sister, Zoliswa Mahanjana, to leave her job and her comfortable life in Johannesburg’s northern suburbs and become a permanent fixture at Carnarvon.

Zoliswa had no experience of farming but she did have a diploma from Fort Cox Agricultural College. “These days,” says Aggrey, “she can only endure a short time in the city before she gets restless to be back on the farm.”

(From the left) Zethu Ruka, Aggrey Mahanjana and Karabo Lengoabala at Carnarvon’s production sale. Student interns, Zethu and Karabo are in the experiential learning phase of their agricultural education at Carnarvon. Aggrey has recently sent the 2 young women to China to look at beef marketing systems. Photo: Nan Smith

LIVESTOCK GROWTH

At the first opportunity, Aggrey sold the dairy cows. “I knew I didn’t want to farm dairy,” he says. “It’s a hard job and technically demanding. I couldn’t afford to be on the farm 100% of the time, so that was an easy decision.”

Working with what he had, he grew his herd by putting Beefmaster bulls to the Shorthorn cows and bought in Nguni cattle. Informed by experience, he has sold most of the Ngunis because of buyer pressure on the breed, which has a reputation of not fattening fast enough at the feedlots.

Remnants of the original Shorthorn cattle that formed Aggrey’s foundation stock can still be seen in the herd. The Beefmaster breed, which Aggrey now favours, has a 25% Shorthorn component along with 25% Hereford and 50% Brahman. Beefmasters are known for their ability to perform consistently and for the functional value they bring to the commercial cattle farmer. Photo: Nan Smith

In February 2010 Aggrey bought 180 2-tooth Dohne Merino ewes and 5 rams. These animals laid the foundation for his present flock of 3 000 sheep, a venture he sees as a consistent and reliable income stream.

“Sheep are consistently profitable,” says Aggrey. He keeps the sheep in camps close to the core infrastructure of the farm and plans to start feedlotting them in the not too distant future. Photo: Nan Smith

PRODUCTION SALE

A clear autumn day in late March marked an important milestone for Aggrey in the form of his first livestock production sale, presided over by Elliot Brothers, Eastern Cape auctioneers.

Mahanjana 4980: Buyers at the Carnarvon production sale look out over mixed groups of cattle. Ngunis dominated these lots, which were auctioned at the end of the sale. Because downward pressure on Nguni prices from feedlot buyers makes it difficult for the breed to stay competitive in the feedlot market, Aggrey says he is moving away from Ngunis. Photo: Nan Smith

The sale went well with animals fetching above market averages. Most of the buyers were from feedlots, but there was encouraging interest from developing farmers, some from as far away as KwaZulu-Natal Province.

Good organisation and decent, well-maintained handling facilities and pens help to make a production sale a pleasant experience. Aggrey credits his predecessor from whom he “inherited” the stock handling infrastructure. “He was a good farmer, a Shorthorn specialist, who knew what he was doing,” he says.

Celvin Burger, Elliot Brothers auctioneer, kept things moving along smoothly sorting out the inevitable buyer/seller resistance on some of the animal groups.

“You can see there are some scrappy cattle on my sale,” Aggrey comments. “It’s because I’m still developing. Next year there will be fewer animals like this, and in 5 years I aim to have the best commercial production sale in the district.”


BUSINESS SENSE AND ADVICE

Aggrey says becoming a commercial farmer (with economy of scale) is a slow process. Access to finance and some understanding of the realities of the process are critical instruments for developing farmers.

“Without access to funding or credit you can forget about farming,” he states categorically.

Financial education begins with what Aggrey calls “the 5 monies”.

  • Money to buy or rent the land.
  • Money to stock the animals and plant crops.
  • Money for monthly running costs like salaries and wages, feed bills, power and fuel.
  • Reserve money for farm development.
  • Money to pay yourself.

“Without maintenance a farm can go downhill quickly. When something breaks it must be fixed immediately or it will get more and more expensive, and difficult, to repair,” he says.

Aggrey’s maintenance mindset shows. His farm is in order – buildings, dams, roads and fences are in good shape.

REFLECTING ON LAND REFORM

Aggrey says he is a beneficiary of land reform with direct experience of the land reform process. “From my experience I can say that land reform has many weaknesses. I think this is mainly because it’s politically driven rather than business driven.”

He reflects that while one can understand that the ANC must deliver on its promises to compensate the dispossessed, the way in which this happens is in conflict with economic principles. These principles do not work in terms of number of hectares allocated to number of people, but in terms of positive and profitable productivity, or loss of productivity, per hectare, he explains.

“Government can say it has delivered so many hectares to so many people, but what is the productivity of those hectares? In terms of number of people who have received land, government can get a tick, although it’s not that big of a tick, but in terms of productivity it’s a big cross.”

Land reform has been a dismal failure relative to the rural economy, says Aggrey.

MENTORING

As a guide and advisor to the smallholder farmer members of SA’s National Emergent Red Meat Producers’ Organisation (NERPO), Aggrey has a good idea of what mentoring means. He sees himself as a fortunate man to have the best possible mentor in his neighbour Marthinus Jordaan.

“When I think of what this man has done for me, tears come to my eyes. He sent me his rams to upgrade my flock, he lends me machinery, he comes over to talk me through problems, he unstintingly gives me his time. He has never expected me to pay him one cent. This is true mentorship,” says Aggrey.

Although he has offered, more than once, to buy the farm from the state, there is no willingness from government to sell the land to him. Despite this he counts himself as one of the lucky ones. He longs for the day when he can spend more time at Carnarvon.

“It’s one of the best farms in the Eastern Cape and I want to keep it like that.”