Mtobeli Mxotwa: Investment in farming projects producing good results

The Eastern Cape is on the threshold of becoming the food supplier of Africa.

The long-awaited rural economy transformation model (RETM) of the Department of Rural Development and Land Reform has started in earnest in the Eastern Cape with the recent official opening by Rural Development Minister Gugile Nkwinti of a cheese factory in rural Keiskammahoek outside King William’s Town.

The minister emphasised that the youth should be trained in various skills so they could drive the rural development projects.

Nkwinti’s rural development policy is premised on three phases that feed into each other with the ultimate aim of transforming the previously underdeveloped rural enclaves into sustainable, economically viable human habitats that will discourage rural villagers from flocking into the cities to look for a better life.

The first phase entails satisfying the basic human needs such as food security, accommodation, health and education.

Rural Development and Land Reform Minister Gugile Nkwinti
Picture: Lulamile Feni

This first phase taps into the guidelines and principles of the Freedom Charter where people in the countryside are assisted by the government to grow their own food by providing them with the implements and inputs.

This phase is followed by the provision of the needed infrastructure such as roads, bridges, telecommunication and schools so the rural villagers can get the job done and develop themselves.

The second phase would see the mushrooming of small-scale rural enterprises which emanate from the available infrastructure.

This stage will enable the rural people to graduate into the third phase, which would involve the establishment of rural industries such as agro-processing plants and the provision of rural enterprise capital such as the advent of the Rural Women’s Bank.

It was launched in Cape Town during the Women’s Month of August this year by Nkwinti.

He will officially open a regional branch of this bank on Thursday in Alexandria.

The RETM is a tool to implement agrarian transformation.

The goal of the agrarian transformation strategy is to have social cohesion while giving effect to the objectives of rural development.

Agrarian transformation relates to the rapid change in the patterns of ownership of land, crops and livestock, and control of development that takes place on the land.

The RETM has its genesis in the rural development framework and the policy for the recapitalisation and development programme of the Department of Rural Development and Land Reform.

Key in the RETM is the separation of development and governance, and clarification of institutional roles and role relationships.

A governance structure must be accountable to the people.

The second institution which people must put in place is that which should manage and control their investment, development and financing facility.

Such a facility could be managed either by themselves alone or with a strategic partner of their own choice.

The RETM creates a cycle of institutional accountability.

Recently the Amadlelo Agri and Seven Stars Dairy Trust in Keiskammahoek celebrated 10 years of growth and development of communal dairy farming in the Eastern Cape.

Amadlelo Agri, which provides the dairy expertise, has clubbed together with irrigation schemes in the Eastern Cape with a vision to make the Eastern Cape the food supplier of Africa.

In this deal Amadlelo contributes to the transformation by creating profitable, sustainable black-empowered agri business.

In 2005 Amadlelo responded to an advertisement for an expression of interest to partner with the then Eastern Cape department of agriculture in the resurrection of the irrigation schemes in the former Ciskei and Transkei that used to produce milk.

The journey began with the opening of a 900-cow state of the art training facility at the University of Fort Hare in August 2007.

This was followed by the development of the 600-cow Middledrift Dairy opening in 2008.

That project was funded by the Amadlelo and the National Empowerment Fund.

The Seven Stars (Keiskammahoek Irrigation Scheme) was initially started in 2010, jointly by the Department of Rural Development and Land Reform and its Eastern Cape provincial counterpart using a capital injection of more than R65-million to bring 760ha of irrigation and two rotary milking parlours into production at Keiskammahoek Irrigation Scheme.

This was a phased approach and this development was officially opened in 2012, taking the number of cows in milk from 700 to 1 800.

Nkwinti requested that the dairy business should also embark on processing the milk to add to the dairy venture’s value chain.

He advised that the dairy factory be revamped, and that funds be made available to do small scale pasteurisation and cheese production.

A decision was taken this year to substantially increase the size of the processing from 600l to 10 000l per day in two shifts.

The factory produces four streams of cheese for high-end market as well as butter, maas and milk for the local market.

Nkwinti has been part of this business development since the early 2000s, first as a agriculture MEC and has continued ever since he became a national minister of rural development and land reform in 2009.

So successful is this Eastern Cape project that it is selling milk throughout South Africa and beyond in neighbouring states.

The Eastern Cape dairy projects have generated about R127-million in profit and more than R65-million in wages since their inception, and are also employing 140 people, mostly from the rural areas.

The projected profit this year is R43-million and it is expected that 30 million litres of milk will be produced this year.

The unique partnership and shareholding in Coega Dairies in Port Elizabeth has enabled communities to access and own the entire value chain and access to sophisticated local and African markets.

The RETM has had far-reaching ramifications in all corners of the Eastern Cape and parts of KwaZulu-Natal.

Although Amadlelo Agri provided the initial seed capital which enabled Ncera Macadamia to start, the provincial agriculture department and the national Department of Rural Development and Land Reform have propelled the Ncera agriculture business to greater heights with their huge capital injections.

The business is now competing among the best in the world with its macadamia nuts.

The Shiloh Dairy in Whittlesea near Komani was started in February 2011 and is currently milking 900 cows.

Several strides have been made in other parts of the province where irrigation schemes have been revived.

When the national Department of Rural Development injected R38-million into the Ncora irrigation scheme, it enabled the Ngcobo irrigation scheme to increase its 300ha under irrigation by another 450ha.

This enabled it to milk 1 800 cows with the potential to milk a further 7 000 cows.

The Mantusini Dairy in Port St Johns, which was started last year, is still in the development phase milking just less than 300 cows with the potential, once completed, to milk 800 cows.

The Makhoba dairy project in KwaZulu-Natal started milking cows in 2011, also with a phased approach which has only in the last year began to be of a scale that will lead to sustained profit, milking 700 cows.

Mtobeli Mxotwa is a spokesman of the Ministry of Rural Development and Land Reform.

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