KwaZulu-Natal Business 2016-17 edition

Growing agri-business in KZN
Agri-parks and trade agreements form the backbone of the province’s agricultural future,
and will be instrumental in facilitating joint ventures between communities and investors.
As South Africa continues to seek market access
for agricultural products, an agreement
with the US secured its position as an African
Growth and Opportunity Act (AGOA)
beneficiary.
Through the AGOA agreement exports of agricultural
goods are facilitated, although cheaper US
chicken imports continue to threaten the local poultry
industry. The KwaZulu-Natal Executive Council has
identified key commodities such as red meat, chicken
meat, dairy and dairy products, vegetables, dry beans
and soya beans as focus commodities that have the
potential to become self-sufficient industries and eventually
enter the export market.
In his 2015 budget address, Agriculture and Rural
Development MEC Cyril Xaba stated that agriculture
should be viewed as a business that extends across
the entire food and agricultural chain, from farmers
all the way through to consumers. The development
of Agri-parks was proposed in a bid to attract new
business opportunities and investors. An Agri-park is
a networked innovation system of agro-production,
processing, logistics, marketing, training and extension
services, all of which is located within a District
Municipality.
A total of 10 Agri-parks are planned for KwaZulu-
Natal at a cost of R45-million per park, and each will
centre on the dominant commodity of the surrounding
area. Agri-parks represent a 10-year programme and
are envisaged to be fully functional by the year 2025.
Farmer production as the primary unit
A strong Agri-park base of primary production is necessary
for the success of this initiative, and this will
enable the parks to feed into the value chain and,
in so doing, ensure participation in the agricultural
economy by the Agri-parks. At present there are 321
national rural development projects, 157 of which
are concentrated in KwaZulu-Natal, and these cover
7 235.5 hectares and total 5 446 small-hold farmers. At
the ground level, these production sites will be controlled
by various forms of enterprise that are owned
by local producers, smallholder farmers and manufacturers,
all of whom will hold shares in the Agri-parks.
One such enterprise (and the first basic component
of Agri-parks) is the South African Farmer
Development Association (FPSU). As its name suggests,
it aims to see growers develop from smallscale
to larger operations and, in so doing, to find
their place in the first economy. The FPSU is a rural
small-holding farmer outreach and capacitybuilding
unit that links with farmers and markets.
The FPSU does primary collection and some storage,
in addition to some processing for the local
market, along with extension services such as
mechanisation.
In March 2016, the Department of Rural
Development and Land Reform (DRDLR) handed
over R74.5-million towards addressing the needs
of distressed small-scale growers. The agricultural
economy can expect contraction as a result of the
droughts this past year, and in KZN 153 000 farmers
were affected by the drought, with 35 731 reported
livestock losses.
To date 4 750 farmers have been provided with
assistance. Measures for farmer relief and recovery
in the province started on 11 January 2016 and included
feed and medicines to the value of R36-
million, with R2.1-million in livestock water provided
for the drilling and installation of boreholes, in so
doing equipping 75 dams and drilling 62 boreholes.
Importantly, the DRDLR has taken essential steps
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