Cultivating agri-business in Limpopo

Farms are just the beginning of the industry — jobs can be created in keeping processing local

At the confluence of the mighty Shashe and Limpopo rivers in the north right up to the silver mists of Tzaneen, home of the Rain Queen, the Limpopo province is the country’s breadbasket and one of South Africa’s most important agricultural regions as a significant producer of livestock, fruit and vegetables.

While the agriculture sector has faced the challenges of severe drought and floods, stakeholders at the Limpopo International Conference, held at the Carousel Hotel & Casino in Hammanskraal last week, are optimistic it can still contribute to the provincial economy.

Limpopo also boasts a thriving agro-processing industry, which offers significant potential to increase value addition, jobs, income and export opportunities, and to enhance food security while reducing dependence on imports. However, the industry is faced with numerous constraints. The upstream industry in particular is faced with the constraints of frequent droughts, poor soil fertility and high ambient temperatures. The sector is also constrained by high costs of production inputs — seed, fertiliser and chemicals — as well as a lack of funding and com- mercial farming skills.

The Industrial Development Corporation (IDC) revealed at the conference that it was focusing on the development of the agroprocessing industry with a view to increasing demand for primary agricultural products that can lead to job creation and add value to primary products.

According to Dr Judex Oberholzer of Urban-Econ Development Economists, Limpopo’s AgroProcessing Strategy was completed in 2012, and its goal is to “contribute to the development of key sectors of the provincial economy”. Agroprocessing industries integrate other sectors along the entire value chain, including primary and secondary activities, said Oberholzer.

Limpopo covers an area of 12.46 million hectares, accounting for 10.2% of the total land area of South Africa. The province is endowed with abundant agricultural resources and is noted for its production of fruits and vegetables, cereals, tea and sugar. According to statistics from the Limpopo department of agriculture, the main horticultural crops in the province’s percentage of national production saw mangoes at 75%, pawpaw 65%, citrus fruit 25%, tomatoes 75%, macadamia nuts 54% and avocados at 60%.

Over the past decade tomato production has remained stable above 400 000 tonnes per year according to Marci Pather, business development director at All Joy PLC. He said the drop in production in 2006, 2007 and 2011 was due to unfavourable climate conditions and high production costs.

“The increases in 2012 and 2013 recording the highest production volume at 600 000 tonnes is positive, [but] this is [nevertheless] inadequate to satisfy the requirements of the industry,” said Pather. He said in the next five years the southern African tomato market’s import tariffs on imported tomato paste will benefit and grow the local fledgling tomato processing industry.

“Emerging farmers can benefit from the high demand for tomatoes by the additional capacity [produced] at strategically located processing factories,” said Pather. “Government is working closely with the producers and the industry to develop a programme to encourage the production of industrial/ factory tomatoes. Our growers programmes are expected to provide organised support for the emerging farmers.”

Oberholzer told delegates at the investment conference that the increasing demand from avocado processing presents great potential for growth.

He said the promotion of local avocados has been successful, especially in the UK. “The South African avocado industry has a strong reputation in international markets,” said Oberholzer.

While this was good, he said transport and port abilities and shipping cycles still pose a threat, as delays can easily reduce shelf life by five to 10 days.

Regarding the production of macadamia nuts, the South African Macadamia Growers’ Association includes among its 518 members 78 smallholder black farmers, most of them on communal land in the former Venda homeland in the northeast of the country.

The IDC has played a large role in the expansion of the high-value South African berry industry over the past few years. Tzaneen Blueberries established 17.5 hectares of blueberry plantations in Limpopo at its own cost. The company required additional funding for the completion of the development, which included funding to bring the existing plantings to bearing stage, building the pack-house and procuring farming equipment. The IDC’s R13.5-million funding for the project will create 62 jobs.

Indigo Fruit Farming is a vertically integrated soft citrus grower, focused largely on the Nadorcott mandarin, with farming and packing operations in Limpopo, Mpumalanga and the Western Cape.

The IDC is funding Indigo’s nursery expansion, orchard development, pack-house expansion, hail netting installation and the purchase of plants and equipment for R120-million, helping to create community ownership.