AFGRI, South Africa’s preeminent agricultural services and food processing company, was delisted from the JSE two years ago. During this time, the strategic imperative put in place by the company – to drive food security across the continent – has delivered an array of tangible results.
Today marks two years since AFGRI was taken private by an investment consortium that included both international and local shareholders, and company management. Michael Wilkerson, Chairman of AFGRI and a director of AFGRI’s largest shareholder says, “AgriGroupe is pleased with the progress made by the company to date in pursuing its strategic goals, which included improving its core operations and customer service, expanding into Africa, strengthening its balance sheet and divesting non-core assets, while taking the lead in supporting development and transformation in the agricultural sector in South Africa.”
He goes onto elaborate, “I am pleased to report that AFGRI now operates in 19 African countries in which we’re making a meaningful contribution to agriculture and the grain value chain, whether through storage and post-harvest solutions, credit and other financial products, training, John Deere equipment, commodity marketing, collateral management or industrial foods processing.” Mr. Wilkerson noted that “within eighteen months of the acquisition, AFGRI’s B-BBEE level improved from a level 5 to a Level 3 Contributor Status.”
In June 2015, AFGRI sold its Poultry business to a local consortium which included members of Bafepi Agri, a 20% shareholder of AFGRI. This transaction successfully created Daybreak Poultry, now South Africa’s largest Black owned and operated poultry operation, and enabled AFGRI to better focus on its core grain management and financial services businesses. AFGRI continues to support Daybreak through credit facilities, ongoing technical support and provision of feeds and other key inputs.
FOCUS ON AGRICULTURAL DEVELOPMENT AND TRANSFORMATION
“AFGRI has embarked on an immensely successful training and mentorship programme for emerging farmers in South Africa and across the continent in support of our dedication to agricultural sector development and transformation,” says Chris Venter, the CEO of AFGRI.
Venter explains that in February 2014 AFGRI entered into an agreement with the Economic Development Department, the Department of Trade and Industry, the Department of Agriculture, Forestry and Fisheries and the Department of Rural Development and Land Reform in terms of which AFGRI pledged R90 million over a period of four years to the development of emerging farmers, as well as towards other projects targeted at community and rural development. Halfway through the implementation of the agreement, a total of about R35 million has been channelled through to the initiatives, with an overwhelmingly positive response from the farmers, communities and government departments involved.
“These are not only economic success stories for our emerging farmers, but for the thousands of lives meaningfully improved in their communities,” Venter went on to say. “Everything we do in our initiative, aptly named Harvest Time, is measured and monitored. The input we provide through training and especially the mentorship programme is what sets us apart.” He explains that AFGRI has nine decades of experience combined with up-to-date services, which assists emerging farmers immensely. Not only does AFGRI provide access to finance, which is a challenge for emerging farmers, but state-of-the-art solutions such as precision farming technology with agronomist input provided through a joint venture with GeoAgro, a leading provider of satellite-based data and analysis. Technology-linked offerings such as these are vital for farming in the 21st century, as they vastly improve crops, save money, add to efficiencies and ultimately lead to improved yields.
“The cycle is self-fulfilling in that the emerging farmer is able, with guidance from AFGRI, to access markets, store grain, sell produce in an active market, repay working capital loans and then most importantly, retain and invest the profits. The training and mentorship component is invaluable as this provides input from experts to guide, train, listen to and engage with the farmer – often this type of encouragement and support is the most valuable as it feels like a true partnership,” said Venter. AFGRI is involved in initiatives which take emerging farmers out of poverty and a subsistence existence, to a situation where they are able to feed themselves, produce enough to sell and to advance from small-scale farming to create medium-sized enterprises.
“Increasing profitability ensures that our emerging farmers will become successful commercial farmers, actively contributing to food security in our country. It is our ambition that these farmers will grow to a size where they will even be able to export and thus secure food for the continent,” added Venter. With this comes the ability to increase land planted, either by leasing or buying the land. “We have one emerging farmer who began by planting 120 ha, increasing this to 236 ha, then 540 ha and the goal for the coming season is to plant 1,000 ha. Although still small relative to commercial farmers, this is an example of how small farmers take the otherwise insurmountable steps to become larger successful farmers,” he said.
“Harvest Time is also involved in a micro-farmer programme which in the past two years trained over 250 micro-farmers, resulting in the establishment of several community vegetable gardens, which provide sustainable food and livelihoods in their communities,” says Marion Shikwinya, Managing director Harvest Time.
AFGRI’s support to the agricultural sector does not stop there. Over the past six months, the company has spent at least R20 million on several drought relief initiatives in South Africa. This included the donation of animal feeds, capping storage rates, as well as assisting in the provision of some animal feed products at discounted prices. “At AFGRI our relationships with clients are for life. This means that when times are tough, we need to stand side-by-side,” says Wilkerson.
Vaughn McTaggart, AFGRI’s Head of Agricultural Development Services (“ADS”), explains “ADS is an AFGRI initiative active in Uganda, Zambia and Zimbabwe, where a father figure (“Abba”) is found within a community to assist in unlocking the potential of small-scale farmers to fully explore their ability to ensure efficient land usage. With investment from AFGRI the results have been astounding. “Africa is a fertile continent – all we need to assist with is the tools to make it work and we believe that we can help by being an enabler to food security.” Once again the benefits of time, money, expertise and guidance is immense and social upliftment a key benefit of the programme.
The main aim of the programme is to take small-scale farmers, currently subsistence farming, and build them into semi-commercial farmers through daily assistance and guidance. This guidance, coupled with stewardship of money and life skills, ensures that the project has the potential for expansion as local product demand is currently much higher than production levels.
“Our Zambian Abba Horticultural Project is key to poverty alleviation and transformation and has been acknowledged by the President of the country, as well as the well-known Royal Barotse establishment. These are accreditations that we are proud of as they are touching the hearts of the people and ensuring food and sustainable livelihoods are maintained,” explained Venter. Not only has acclaim been forthcoming, but the farmers recently learnt that their products will be sold across the border in Namibia in the town of Katima Mulilo, through a local South African retailer.
In Uganda the Abba Mechanisation Circle provides farmers with access to mechanisation, which is purchased by AFGRI and made available to them through a rental arrangement. The provision of mechanisation, which is often used in a co-operative-type setting, makes a significant impact on yields and time, allowing the farmers to diversify and also limits risk. Once harvesting takes place ADS assists further by providing storage facilities so that the aggregation of the crop means that larger quantities of grain can be sold into the market.
In Zimbabwe the Abba Training College follows the principles of allocating 1 ha (of land under irrigation) to one student, with a two to three-year training programme in place. Students grow butternut, potatoes, onions, tomatoes, cabbage and maize. Proceeds from the sale of produce allows for the students to be trained, as well as to be accommodated at no cost. Young upcoming farmers are also engaged to assist in the development of the African market environment for smallholder farmers through AFGRI’s larger agricultural models. “The initiative is a sustainable model, and can be replicated anywhere in Africa,” said Venter.
“The consistent theme throughout these initiatives is AFGRI’s commitment to foster a strong, vibrant and successful agricultural economy on the continent. This is a sector through which we can make a meaningful contribution to the lives of those with which we partner and to which the benefit of food security flows,” noted Wilkerson. He explained that no matter which country or market AFGRI is involved, the company strives to develop and care for its customers. This comes in the form of imparting knowledge gained from its nine decades in business, as well as from financial support, mentorship, agricultural services or the provision of agricultural equipment and inputs. Wilkerson concluded, “AFGRI’s success will only be found in the long-term prosperity of our farmers, to whom we remain dedicated in both ‘lean and fat years’”.
AFGRI’s human stories from across the continent:
In Mpumalanga Solomon Masango now has a 617 ha farm and recently won Farmer of the Year with Grain SA
Humble beginnings meant that Salomon originally farmed on 50 ha but three years ago this started to change when he joined the AFGRI Harvest Time training and development programme. Here he garnered much-needed training in the form of in-class training, on-farm technical training with agronomists, personal development, as well as basic computer training. Monitoring and mentorship took the form of regular visits to the farm, assistance in managing accounts to ensure payments to input suppliers were made, as well as assistance with pre-season budgeting and spending. From the humble 50 ha, Solomon has developed into farming on just over 400 ha, made up of 140 ha of maize, 260 ha of soya beans and 20 ha of sugar beans. Yields have increased so that he is now able to produce between 6 to 9 tons per ha of maize and 1,5 to 3 tons per ha of soya beans and Solomon’s farm is run with equipment he was able to finance from the profits. The training, mentorship and development programme from AFGRI Harvest Time has helped Solomon learn the latest advanced techniques and by winning Farmer of the Year he walked away with a brand new tractor from John Deere, which will make his operation even more efficient.
Zambia, AFGRI’s Abba Horticulture Model at work
This project is based in western Zambia, 200 km from Livingstone with the closest town being Sesheke. The project aims for a process of total transformation in an extremely poor community. Over the past two years the area has been impacted by severe drought, with exceptionally low rainfall. Five farmers are part of the programme, each with an average of 2 ha used for the production of tomatoes, green maize, green peppers and cabbage. Each farm is provided with diesel pumps and a dripline irrigation system. Farmers are trained in farming techniques, provided with ideas on how to access markets and financial management and budgeting. They then in turn train farmers in the area in order to expand the “Good-Farming Practice” footprint and improve and impact more lives and the most unexpected consequence of AFGRI’s involvement is that these five subsistence farmers are creating approximately 1,000 part time jobs.
The measure of a successful project in a community in need is only once the entire community benefits. In the case of Abba Zambia the project feeds approximately 170 children every Sunday and distributes maize to local churches monthly for onward distribution to widows and orphans. In addition, a popular “work for food programme” has been launched that provides food for more than 50 casual workers every week.
In the Nkangala district of Mpumalanga yields are improving
In this case, a farmer began farming in 2011 cultivating a mere 150 ha of maize. In 2012 he joined the AFGRI Harvest Time training and development programme. Through a mixture of training, monitoring and mentorship the business has grown to 640 ha, which comprises 300 ha of white maize, 300 ha of soya beans and 40 ha of sugar beans. Initial yields were 500kg per ha, but today yields are up at between 4 to 7 tons per ha of maize and soya and 1 to 2 tons per ha of sugar beans. The farmer improved his mechanisation with the purchase of a six-row planter and a harvester head for soya and maize, bought through access to the Harvest Time hire purchase funding model to help grow his farming operations further.
In Metsweding, Gauteng, Skhosana Dingazi is flourishing
In the 2013/2014 season Harvest Time met Skhosana for the first time. Only 68 ha had been planted using a planter which was incorrectly calibrated creating large, inefficient gaps amongst the maize plants. This led to an infestation of weeds. The AFGRI Harvest Time training programme, which Skhosana embarked upon included farmer study groups, in-class training, basic computer training, and on-farm assistance by agronomists, which also ensured that confidence in his skills and ability, coupled with mentorship, was engrained. Finance provided through AFGRI Harvest Time ensured that he could purchase an additional 22 ha of land, bringing the total to 100 ha. Weed management is also under control, with an excellent crop on the land. Full repayment of the production loan has been made, and the next step is to plant 120 ha. This is made possible through the confidence to lease additional land as well as having a true partner where farming matters can be discussed and the best course of action implemented.
In Vanderbijlpark in Gauteng, with a little help from friends, a farming operation is thriving
AFGRI’s Harvest Time initiative came across a farmer who was demotivated and found farming to be hard, as he had found that there was very little practical experience offered in the market place. Overall management of the farm was poor and as a result his 345 ha was overrun by weeds. He joined the AFGRI Harvest Time programme where a dedicated relationship was established between himself and Harvest Time, AFGRI mentors, and GeoAgro agronomists and where he now has access to training, finance and a helping hand. The farmer is now motivated and has exceeded all expectations, despite such a challenging agricultural year. A zest for life has seen overall management of the farm and staff improve, with a crop on the land, which is set to be exceptional.
A portion of the R90 million is invested in social development projects
Corporate social investment at AFGRI hinges on education, food and water security as well as poverty alleviation and across all projects impact assessment is continually measured. In six educational projects, more than 1,000 learners are assisted through mechanisms such as annual tuition fees, donations for schooling requirements from chairs to groceries and costs allocated to the Kimon programme. The impact of our involvement includes outstanding pass rates, increased attendance, freeing up time for teachers to focus on the curricula and environment which are safe and which have running water.
Six projects dedicated to food and water security have assisted learners, staff and have put trainers in place. Again measurable impacts include the provision of fresh vegetables to the community, income generation, personal pride, food security, job creation and security and access to fresh water.
In five projects aimed at poverty alleviation, 1,630 beneficiaries, consisting of children and community members, have been assisted. Positive measurable impacts have included access to a sustainable source of fresh vegetables, drinking water, and balanced nutrition for children and safe houses with comfortable and sufficient sleeping space.