Small-scale sugar cane farmers in the Nkomazi area of Mpumalanga are to benefit significantly from government's Jobs Fund and are expected to double their production and create 1 544 new and sustainable jobs.
The farms should, over a five-year period, increase production from 450 000 tons cane per annum to 850 000 tons per annum.
The Jobs Fund was announced by President Jacob Zuma during the State of the Nation Address in 2011. In June 2011, Finance Minister Pravin Gordhan set aside R9-billion for the Jobs Fund, to be allocated over a three-year period.
The fund is targeted at established companies with a good track record and which plan to expand existing programmes or pilot innovative approaches to employment creation, with a special focus on opportunities for young people.
According to Timothy Hobden, technical advisor to the Jobs Fund at the National Treasury, the sugar cane farmers lacked access to financing, which resulted in dramatic drops in their productivity.
"However, Akwandze Agricultural Finance Ltd, through funding provided by the Jobs Fund, is addressing this need by ensuring these farmers can get adequate, cost effective and appropriate financing with favourable terms," he said.
'Package of farmer support initiatives'
Akwandze is also providing a package of associated farmer support initiatives such as on-site service back up, training and capacity building.
According to the South Africa Sugar Association, the number of small-scale sugar growers has declined by 33 percent - from 50 000 in 2005 to around 33 700 in 2011.
The productivity of small-scale farmers has also been declining. The tonnage in sugar produced by small-scale farmers has dropped from 850 000 per annum at its peak to its current 450 000 tons per annum.
"The decline is attributed to many challenges faced by sugar cane farmers, including a lack of farming experience and poor business skills. Most critically and urgently however, is that they have limited access to appropriate and cost-effective financing," Hobden said.
"This has meant low levels of irrigation infrastructure investment and maintenance, which in turn has meant water insecurity."
Roger Armitage, chief executive of Akwandze, said water was crucial for the farmers. "Without water, you are dead. You are not going to produce cane."
Developing irrigation infrastructure
The company is also supporting a cooperative of 216 small-scale farmers called Siboshwa to expand their growing area of 83 hectares by 20 hectares, developing their irrigation infrastructure and ensuring everything is in place to maintain it according to manufacturer specifications.
This should allow them to produce another 2 000 tons of cane.
Through a grant of R50-million from the Jobs Fund - and matched by a further R70-million from Akwandze - Akwandze will recapitalise irrigation infrastructure for 1 281 small-scale growers, which will help to rehabilitate 10 000 hectares of sugar cane land.
Akwandze will also extend its lending capacity to the growers for replanting, fertilizer, weeding and irrigation costs. The result should be to double the total annual tonnage of sugar cane produced by small-scale growers in Nkomazi.
This would be from the current output of 450 000 per year to 850 000 per year over a period of five years.
Armitage said as production increases, this will in turn lead to an increased demand in farm-level jobs, leading to work opportunities for unemployed local people.
It is anticipated that the Akwandze project will create 1 544 new full time jobs and increase turnover for these small-scale growers.
The fund reports that the incremental revenue will be a major contributor to economic stability and growth in the rural area of Nkomazi.
"This is great news for Mpumalanga, one of South Africa's poorest provinces which, together with the Western Cape, showed the biggest increase of 2.2 in the unemployment rate in the third quarter of 2012," the Jobs Fund said.
For more information on the Jobs Fund visit www.jobsfund.org.za.