Nqadu Willowvale drought resistant maize trials showing progress
One-stop grain value chain for farmers to be implemented thanks to funding allocation of R14.5 m
THE economic benefits from grain, realised through the processing and local marketing of maize products through the four Rural Economic Development (RED) Hubs, will see the Department of Rural Development and Agrarian Reform (DRDAR) construct a new RED Hub near Berlin in the 2017/18 financial year.
The new hub in Tshabo community will be implemented with a R14.5-million funding allocation, and is one of the three new RED hubs to be rolled out over the next MTEF (Medium Term Expenditure Framework) period; others are in Butterworth and Mount Fletcher.
The concept of RED Hubs incorporates support for the entire grain value chain for small-scale farmers in one location: that is access to finance, access to inputs, technical support, mechanisation, storage, milling and marketing, all from the proposed hub locations.
The Eastern Cape Rural Development Agency (ECRDA), which is an implementing agency for DRDAR, is implementing the agro-processing programme that is establishing RED hubs which are financed through partnerships between ECRDA, Department of Rural Development and Agrarian Reform, Eastern Cape Development Corporation (ECDC), the Jobs Fund and Eastern Cape Provincial Treasury.
The existing RED hubs are situated in Mqanduli, Ncora, Bizana and Lady Frere.
The concept aims at promotion of rural savings and investment as money remains within the community, while it stimulates the local rural economy – and the total investment by the government in these hubs over the past three years is R190-million.
The Mbizana Hub, which will be officially launched by President Jacob Zuma later this month, received a budget of R53.5-million, and Ncora received R49-million. Mqanduli received R41-million and Emalahleni R46.5-million.
In the 2016/17 financial year an additional R25-million to enhance operations in all RED hubs, including increasing land, was allocated, with an additional 2 000ha per RED Hub planned.
All the four RED Hubs are equipped with storage facilities – 4 000 tons in Ncora, 1 500 tons in Mqanduli, 2 000 tons in Emalahleni and 2 000 tons in Mbizana. Milling plant equipment has been installed and is operational, while mechanisation sheds were constructed in all the RED Hubs.
The economic benefits from grain is to be realised through processing and local marketing of maize products through the four RED Hubs, supporting 2 199 communal grain producers and creating 197 permanent jobs and 600 temporary jobs.
Maize products are marketed through a sales and merchandising agency agreement with iSpaza Foods and retail stores like Nicks Food SUPERSPAR in King William’s Town, which currently sells samp and super maize meal processed at Mqanduli mill.
A memornadum of understanding and service level agreement with Lethabo Milling has been signed to collaborate on the overall operations of all RED Hubs to ensure efficient and effective operations.
Lethabo Milling has off-take agreements with Masscash Group to supply 10 000 tons of super maize meal per annum, and has recently signed another off-take agreement with Boxer Group to supply super maize meal. In Mqanduli Mill, there is a trading agreement with Umtiza Farmers Corp.
The Ncora mill plant started its commercial sales in August last year. Last year, primary production covering a total of 3 751ha of land with maize and grain sorghum crops produced by these hubs. This gave them a total income of about R8.2-million. The RED hubs created a total of 397 permanent and 679 short-term jobs with a potential to create more jobs when Mbizana and Ncora mills become fully operation.
In 2017/18, DRDAR will promote agro-processing in these hubs by increasing the grain production area from 7 000ha to 10 000ha at a cost of R32-million.