GOOD RELATIONSHIPS VITAL TO COMMERCIAL COMMUNAL FARMING
Building relationships with people on a social level is the vital ingredient in establishing successful communal farming businesses in rural communities, according to WIPHOLD head of corporate affairs Debra Marsden.
Since 2014, the investment company has through its Centane and Mbashe Agricultural Initiative focused on the development of a model for the profitable and sustainable farming of communally owned land in the Eastern Cape, in partnership with communal land owners.
She says, “While challenges abound in terms of setting up a farming operation on land that has mostly lain fallow for decades, these can be overcome through good farming practices. ‘The bigger challenge lies at a social level where mutual respect must be built. The winning recipe is awareness that the community must take responsibility for the project. They must contribute sweat equity in order to make a commercial life out of farming.”
Within four years, the Wiphold/community partnership is seeing signs of success. Today it produces dryland maize and soybeans on over 2 000ha of communal land, together with more than 2 000 landowners from 32 villages.
Maize yields are already up to about 8tons/ha on some of the lands and the communal farmers increasingly speak the language of commercial ownership and responsibility. To date more than R18 million has been distributed to participating community members. Many years ago, Khanya Women’s Club, a savings club in the Eastern Cape, was looking for an investment vehicle focussed on empowering women with opportunities that would enable them to participate in the mainstream economy.
“So,” says spokesperson Martina Langa, “when WIPHOLD called for women’s organisations to buy shares in their organisation, we seized the opportunity. Since then the club has advanced through a number of WIPHOLD empowerment vehicles which enabled us to identify lucrative investments and better participate in the economy.”
Club members are part of the WIPHOLD Investment Trust that has more than 1,200 direct and 18,000 indirect women beneficiaries. In turn, the trust is a 14.9 percent shareholder in WIPHOLD, with distributions to beneficiaries flowing from dividends as a result of this stake.
More than R800-million has been distributed to WIPHOLD shareholders and beneficiaries in 24 years of operation. The unique model that established black women as direct and indirect shareholders of the group through the creation of the WIPHOLD Investment Trust and WIPHOLD NGO Trust (which jointly hold 33.5 percent of the group) has been instrumental in delivering on the
And these numbers don’t take into account any new economic activity and job creation resulting from spin-off ventures and parallel businesses being started by community members with the income they have received.
“The initiative recognises the inherent potential of the Eastern Cape’s vast tracts of arable land, and that the proper use of land resources in South Africa by small-scale farmers has the potential to play a significant role in enhancing food security, particularly in poor communities,” Marsden adds.
The financing of the initiative comes from crop sales revenue as well as working capital loans from Wiphold, Nedbank and Old Mutual. There is also grant funding from government.
WIPHOLD runs the farming operation with the landowners whose role includes erecting and maintaining fencing, assisting with planting operations, guarding their fields, monitoring their crops, and harvesting.
Marsden says, “A training and mentoring programme ensures skills transfer and focuses on areas such as basic bookkeeping, enterprise development, farming and equipment management. A shift toward self-sustainability is slowly revealing itself. A noticeable improvement has been observed in the number of yard gardens being planted to maize and a dramatic improvement in the quality of the crops.
“This is ascribed to skills transfer both from training programmes and in-field mentoring during the planting season. In 2017, one village also pooled company’s empowerment philosophy.
Through these two entities, WIPHOLD makes an impact daily on beneficiaries across South Africa. They include designated groups, youth and disabled members of society.
Langa says the club chose WIPHOLD for several reasons. “They have a strong leadership team that has influence in the South African financial landscape. Moreover, it has the same vision of empowering women and children and values and principles that we do.”
Beneficiaries receive 80 percent of each distribution, with the remainder donated to NGOs that benefit women and children. Since its inception in 1997, the Trust has distributed just over R140-million to the direct women beneficiaries and more than R35-million to various NGOs.
The trust, with an 18.6 percent shareholding in WIPHOLD, is a powerful instrument that enables the group to touch the lives of more than 200,000 black women through the various non-governmental organisations that make up the trust’s indirect beneficiaries.
One of those NGOs is the National Baptist Church, first introduced to the WIPHOLD investment model in 1994. its individual cash distributions to buy equipment with which to start a new enterprise which is thriving. Other villages have indicated their intention to do the same.
“Work,” she adds, “is also being done on a business
Helen Maachi, First Lady at the church, concedes, “It was a challenge to change the mindset of putting all your money into a simple savings account or under the mattress and rather use it to fund bigger investments. Women no longer have to resign themselves to being a housewife on a little rural farm or confined to sitting at home worrying about their children. Women have choices.”
Other beneficiary organisations include the likes of People Opposing Women Abuse (POWA); the Tshwaranang Legal Advocacy Centre; the KwaDrabo Trust; nursing union DENOSA, banking union Sasbo, the SA Council of Churches, and the plan to establish a wholesale co-op linked to the initiative, which would sell farming essentials such as chemicals, seeds and fertiliser. This will help diversify the income streams of the initiative’s governing entity in which Wiphold has a 40 percent shareholding. The remainder is held by the community participants.”
Marsden, says the company is likely to remain involved in the initiative once it has become fully self-sustainable, because it would make good business sense.
“Part of WIPHOLD’s reason for starting the initiative was to challenge financial and other agri-finance institutions to make finance more readily and easily accessible to small-scale and emerging farmers. We have already observed a very rapid appreciation among our community partners for the commercial nature of the venture, including a loan to be repaid. Financial institutions, and for that matter input suppliers, should take note of what is possible in areas that they would ordinarily perceive as high cost and high risk.”
A profitable and growing business, sustainable economic upliftment and increasing food security are not the only upshots.
She says, “Quantitative analysis does not take into account the social and psychological impact the project is having. Communities are engaging one another and are busy in a way they weren’t before, and, perhaps most importantly, are being treated with dignity and are developing a sense that their futures can be better than they had expected.” Makaota Development Trust amongs others.
More than R115-million has flowed to these organisations from WIPHOLD’s investment activities.
Dividends received have assisted organisations like Denosa to empower nurses to be effective leaders in their field and deliver quality care. POWA has been able to continually provide services to survivors of domestic abuse and rape. Sasbo runs several projects including education programmes for black women and girls and even a lemon grass planting initiative in KwaZulu-Natal.
Professor Lebobe Asnath Masipa, after more than 23 years, still believes her group’s investment
A community member shares, “I used to work in Joburg and travel home past large [commercial] farms in the Free State that went on as far as the eye could see. I never dreamt that this could happen here in Centane.”
Another says: “We are employing our youth on the project and paying them a salary from our income so that they can see they don’t need to go to the city to look for a job.” in WIPHOLD, after attending a presentation at a community hall in Mmbatho, Mafikeng on a fateful day in 1995, was inspired.
“They had invited women to a workshop to hear about their vision for creating a company to empower women. It was inspiring and convinced us to form a group of 20 women that could invest. We called it the Tirisano Group, which means working together, and it still exists.
“We have kept firm relations over the years and through it we are reminded to live and love and to express ourselves as dignified and empowered women.”
Proud Centane landowners
Maize yields are already up to about 8tons/ha on some of the lands and the communal farmers increasingly speak the language of commercial ownership and responsibility.