Fruit­ful steps

Men­tor­ship makes th­ese farms work

Finweek English Edition - - Business strategy - JO­HANN VAN ZYL

THERE ARE SEV­ERAL ex­am­ples of fruit­ful em­pow­er­ment in SA, though there’s no short­age of fail­ures.

In the sugar and fruit in­dus­tries, novice farm­ers have been em­pow­ered for more than a decade. Suc­cess in th­ese ar­eas is be­com­ing in­creas­ingly com­mon­place, and it’s the men­tor­ship and fi­nan­cial in­volve­ment of es­tab­lished farm­ers that’s mak­ing the dif­fer­ence.

In­ad­e­quate man­age­ment skills and in­suf­fi­cient cap­i­tal are the main rea­sons why pre­vi­ously suc­cess­ful farms have sub­se­quently failed. This hand­i­caps Gov­ern­ment’s aim of hav­ing a new gen­er­a­tion of farm­ers es­tab­lished over the next decade, and cre­ates un­cer­tainty about SA’s long-term food pro­duc­tion.

“As an in­dus­try, we can­not be­come in­volved in spe­cific land re­form agree­ments or trans­ac­tions,” says An­ton Rabe, CEO of the De­cid­u­ous Fruit Pro­duc­ers’ Trust (DFPT). “But we can fa­cil­i­tate pro­cesses, en­cour­age change, do re­search and pro­vide in­for­ma­tion, as well as speed up agree­ment be­tween par­ties.”

As far back as the Eight­ies, lead­ers in the fruit in­dus­try were far-sighted enough to cre­ate op­por­tu­ni­ties for farm work­ers and oth­ers to share in the pros­per­ity of the in­dus­try, Rabe says. “So we have al­ready achieved a great deal to en­sure es­sen­tial trans­for­ma­tion with­out los­ing com­pet­i­tive­ness in the world mar­ket.”

The DFPT gave Fin­week a list of more than 30 suc­cess sto­ries (some out­lined be­low) where men­tor­ship and other in­volve­ment by es­tab­lished farm­ers have played a role. • On the farm Ou­drif in the south­ern Cape’s Langk­loof Val­ley, which has mod­ern pack­ag­ing and cool­ing fa­cil­i­ties, and neigh­bour­ing farm Ap­pelk­loof, bought by Ou­drif’s own­ers last year, the work­ers’ trust shares in the pros­per­ity.

The trust has a 75% stake in private com­pany Ou­drif Cool­ing, with the rest held by pre­vi­ous owner Mar­ius Vosloo and his wife. Many of the trust’s work­ers had been work­ing for him for at least 20 years and he wished to em­power them.

The more than 200ha of or­chards on the two farms and the plans to cul­ti­vate a fur­ther 100ha in the next few years make this an enor­mous op­er­a­tion, which could be doomed to fail­ure with­out the nec­es­sary man­age­rial skills.

Vosloo is still help­ing them in this

re­gard, though he is iden­ti­fy­ing and de­vel­op­ing man­age­ment know-how among his work­ers, now his part­ners, on an on­go­ing ba­sis.

Pi­eter Oc­to­ber, chair­man of the Ou­drif work­ers’ trust, de­scribes their part­ner­ship as fol­lows: “We are just or­di­nary work­ers who do not have much of a long-term vi­sion. Now we have re­spon­si­bil­ity, pride and pos­i­tive fu­ture ex­pec­ta­tions.” Karsten Farms, on the banks of the Orange River near Kanonei­land, es­tab­lished the Yarona In­vest­ment Com­pany as long as 13 years ago to em­power its work­ers. To­day 26 of the orig­i­nal 33 share­hold­ers are still in­volved in one of SA’s largest ex­porters of ap­ples, pears, cit­rus fruit, ber­ries and dates.

When Piet Karsten made his em­pow­er­ment de­ci­sion in 1994, he de­cided to in­volve the De­part­ment of Land Af­fairs through his LRAD pro­gramme, which made R15 000 per fam­ily avail­able for buy­ing shares. One of the con­di­tions was that the shares had to be kept in a trust for five years and could not be on-sold.

Esta Ti­tus, one of the share­hold­ers and also a mem­ber of Karsten’s ad­min­is­tra­tive staff, says: “I kept my shares, be­cause it was a good in­vest­ment. We are kept in­formed about the com­pany’s growth ev­ery year and see how the in­vest­ment grows.” South­ern Farms, also in the Orange River re­gion, pro­duces 1,1m car­tons of grapes a year and has about 220 full-time work­ers as well as a fur­ther 1 000 part-time work­ers who help at har­vest­ing time. This farm em­pow­ers work­ers through, among oth­ers, lit­er­acy pro­grammes from AgriSETA, and skills and man­age­ment train­ing for work­ers so that they can work in mid­dle and top-man­age­ment po­si­tions. The Beth­le­hem Farm­ers’ Trust in Beth­le­hem in the east­ern Free State – where, among oth­ers, the In­dus­trial De­vel­op­ment Cor­po­ra­tion, the De­vel­op­ment Bank and Af­gri are in­volved, as re­ported pre­vi­ously by Fin­week – has of­ten been sin­gled out as one of the most suc­cess­ful em­pow­er­ment projects in SA. This farm, which is renowned for its qual­ity ap­ples, has a ma­jor sup­ply con­tract with one of SA’s well-known re­tail groups and, with the nec­es­sary men­tor­ship, is now be­ing run by about 100 black farm­ers. Some of the farm­ers have al­ready de­vel­oped to such an ex­tent that they’ve iden­ti­fied and de­vel­oped other busi­ness op­por­tu­ni­ties. The Du Toit group of Ceres, one of the largest fruit and veg­etable pro­duc­ers in SA (its or­chards cover a mas­sive 2 400ha), em­pow­ered its work­ers about nine years ago by form­ing two com­pa­nies, Crispy Cool­ers and Crispy Farm­ing, which of­fer share­hold­ings to its work­force of about 1 400.

This group also made use of the LRAD pro­gramme of the De­part­ment of Land Af­fairs to help its work­ers fi­nan­cially to ob­tain the nec­es­sary shares. Jan le Fleur, one of the share­hold­ers, who has in the mean­time pro­gressed to the po­si­tion of pro­duc­tion man­ager on one of the farms, says this was so re­ward­ing fi­nan­cially that he can now af­ford to send his chil­dren to bet­ter schools and even to travel out­side the Langk­loof area.

Mal­colm MacKen­zie, project man­ager of the Du Toit group, says it was in­volved in men­tor pro­grammes and other rel­e­vant train­ing, which led to the two em­pow­er­ment com­pa­nies grow­ing to a com­bined cap­i­tal­i­sa­tion of about R60m.

Gys du Toit, chair­man of Crispy Cool­ers and Crispy Farm­ing, says the group re­alised its em­pow­er­ment plans and im­proved the fi­nan­cial po­si­tion of its work­ers, mak­ing suc­cess­ful man­age­ment trans­for­ma­tion pos­si­ble and con­tribut­ing to the re­dis­tri­bu­tion of land. The Mo­ravia de­vel­op­ment project, on the banks of the Berg River near Piket­berg in the West­ern Cape, is, ac­cord­ing to the DFPT, one of the best ex­am­ples of how well some fruit pro­duc­ers are em­pow­er­ing their work­ers.

The project was ini­ti­ated by Jo­hann Con­radie of Con­radie Farms near Porter­ville – which pro­duces tons of cit­rus fruit and wine and ta­ble grapes ev­ery year – to en­able his loyal and per­ma­nent work­ers in his six pro­duc­tion units – to share in the pros­per­ity of his busi­ness.

Shares were bought with the as­sis­tance of the De­part­ment of Agri­cul­ture, and Con­radie Farms con­trib­uted 80ha of land with wa­ter rights from the Berg River and wine-pro­duc­ing rights for 500t to the Uit die Bloute and Disa group projects, in which 330 work­ers have in­ter­ests.

The project is so highly thought of in the West­ern Cape that Cobus Dowry, the West­ern Cape MEC for agri­cul­ture, vis­ited Mo­ravia in 2004 to hand over his de­part­ment’s first cheque for R2,9m to those in­volved. The prov­ince has al­ready made a to­tal of R7,8m avail­able to the share­hold­ers.

Ac­cord­ing to the DFPT, Mo­ravia de­vel­op­ment wines has cre­ated sev­eral new jobs in the Piket­berg area and boosted eco­nomic growth in the re­gion.

Qual­ity counts. Marie-Louise du Plessis and Regina Hor­ing of Mooigezicht in the West­ern Cape

Mal­mai­son’s

juicy ta­ble grapes (top) and Ou­drif’s qual­ity ap­ples

(right).

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