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Reaping the rewards of land reform

You must be a really hard nut to crack if you want to make it as a macadamia nut farmer

because it takes at least seven years to start harvesting after your investment. At least, that is the opinion of Cowan Skelem, one of those behind Ncera Macadamia Farming (NMF) near East London who says that it takes great determination to make it in this industry.

Although macadamia nuts are said to be hard to beat when it comes to the most lucrative crop per land area used in South Africa, it takes several years for farmers of this crop to finally see a return on their investment.

“It takes perseverance and deter- mination because one waits more than seven years before a tree can even produce nuts,” said Skelem. He began his role at the farm as a general worker pushing a wheelbarrow. But today, Skelem is a skilled worker who is involved in the overall running of the business, from administration to logistics and overall supervision.

Before working at the farm, he was unemployed after he lost his job in the local town and was battling to provide for his family of four. Landing a job at NMF allowed Skelem to buy food and school uniforms for his children and send them to good schools.

“I am happy and blessed to be working here at the farm. I enjoy my work and it helps me to put food on the table and provide for my kids,” he said.

Economic growth

The NMF is 51 percent community- owned and is one of many success stories that show land reform can result in greater inclusion, economic growth and job creation.

Government has identified access to land, through land restitution and other schemes, as one of the ways to grow the economy while ensuring food security and increasing agricultural production. To date, over 4 850 100 hectares have been acquired through the land redistri- bution programme.

Since 2009, over 1 743 farms have benefited from the Recapitalisation and Development Programme. However land reform has not been without challenges as some communities still lack the necessary and appropriate support as well as access to finance that can help them grow to commercial farming status. The Eastern Cape has large underutilised tracts of land still under communal tenure that could be accessed and worked effectively.

But the community of Ncera is determined to succeed and through partnerships and support from the government, the 40 000-strong community is on its way to becoming one of the country’s top macadamia nut producers.

The R100 million project thrives on partnerships between East Cape Macadamia (Pty) Ltd (ECM), the community under the Vulindlela Investment Trust and government.

Community at the centre

The model is based on an 80-year land lease agreement which was signed between the community and ECM. The agreement states that the latter oversees production, marketing, processing and management and facilitates access to markets while creating employment as well as transferring skills and generating income for the community whose land they use.

The most defining feature of this partnership is that the community has the final say on procurement opportunities, skills transfer and job creation. This guarantees the community the bulk of all opportunities

First introduced in the country in the 1960s, South Africa has moved to be the second big- gest macadamia producer in the world after Australia with approximately 25000ha of pro- duction land shared between the four provinces, according to the latest data from the Southern African Macadamia Growers’ Association (SAMAC).

Production increased more than 20-fold over the past 20 years, from 1 211 tons of nut

in shell (NIS) in 1991 to an industry capable of producing 46 000 tons in 2015.

The total value of annual production has increased from R32 million in 1996 to approxi- mately R3.2 billion in 2015. Due to a severe drought period production decreased, with a total production of 38 000 tons NIS in 2016, valued at R2.714 billion, according to SAMAC.

In 2017 the South African macadamia season finished with a bigger crop than initially anticipated with approximately 44 610 tons harvested.

According to the Southern African Macadamia Growers’ Association, new macadamia tree plantings have increased the number of trees in South Africa from about one million in 1996 to more than eight million in 2016, covering a total area of approximately 28 000 hectares.

It is estimated that at least 7 150 permanent job opportunities have been created on macadamia farms and another 600 permanent jobs in cracking facilities. In peak season, the industry presently provides employment for an additional 8 150 workers. A total of 12 500 full-time equivalent workers are estimated to be employed by the macadamia industry in South Africa.

Community reaps rich rewards

Community members in Ncera have not only found jobs through NMF but also benefit from the farm’s many economic spin-offs.

Their story is a further indication of the impact that access to land can have on economic growth and job creation. The farm currently employs 157 permanent community mem- bers as well as seasonal workers during the harvesting period.

“Our story is very important to the community especially when it comes to the skills that this project has exposed us to. I started off as a general worker pushing a wheelbarrow but now I am a skilled worker who is exposed to the overall run- ning of the business,” said Skelem. He explained that 90 percent of the nuts produced on the Eastern Cape farm are exported to big markets such as the United States, Russia and China.

“I am very proud because it means generations to come, even my own grand-children, will ben- efit from the life-long dollar-based income generated by the Trusts through the sale of the nuts,” he added.

NMF board inaugural chairman Joe Jongolo said that the project’s business strategy is prolonged and focuses on education and skills development which are aimed at turning Ncera into a self-reliant and sustainable rural community.

“For the first time, macadamia nuts are being grown by rural communities who own the full value chain, including the nursery and factories. “This sends a statement to the whole industry that rural communi- ties are capable, and with land they are not just coming in to own one component of the industry as la- bourers − but they are able to thrive in the industry as a whole,” he said.

New opportunities

Jongolo sees the farm as an alternative to the mining sector as the Eastern Cape has been known to be the biggest supplier of labour to the mines. The project has also boosted local contractors in the areas of trans- port and logistics as most of the work in these areas is given to local companies. Consequently about R200 000 per annum is set aside for services provided by contractors operating within the Ncera community.

The project has made more than R11.6 million since its launch in 2006 and has grown to also include a top-class nursery. The nursery received a five-star rating from the SA Macadamia Growers’ Association and has led to the expansion of NMF and gave birth to Amajingqi Macadamia Farming lo- cated in Amajingqi near Willowvale on the Wild Coast.

Launched in 2015, the project has already seen the production of 200 hectares of trees and future expansion is on the cards.

Broadening horizons

Jongolo says the long-term inten- tion of the community is to branch out of the Eastern Cape in order to develop the whole macadamia value chain and create sustainable economic opportunities in provinc- es such as Limpopo, Mpumalanga and KwaZulu-Natal.

“We see NMF as a template for empowerment and economic development for rural communities which can be duplicated across the country and to other farming sec- tors. We challenge the government to seriously look unto ventures of this nature,” he said.

While the pace of land reform and restitution has been the subject of criticism, government is adamant that it is addressing the challenges emerging farmers experience as a matter of urgency.

Government support is also provided through various state programmes such as Letsema, the Recapitalisation and Development Programme, and through funding agency Mafisa.

Support involves training, access to credit, on-and-off farm infrastructure, access to markets, subsidising agricultural insurance and the transfer of scientific research and knowledge.

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