Agricultural development strategy waterberg municipality

REPORT 1:

1. 
   INTRODUCTION 4
   
   1. 
      Orientation 4
      
   2. 
      Methodology 4
      
      1. 
         Literature review 5
         
      2. 
         Identification of relevant role players 5
         
      3. 
         Interviews and field verification 6
         
      4. 
         Telephonic interviews 6
         

2. 
   STATUS QUO: PRIMARY PRODUCTION IN WATERBERG 6
   

1. 
   Trends 14
   

3. 
   POLICY ASSESSMENT 16
   
   1. 
      National micro-economic reform strategy 16
      
   2. 
      Limpopo growth and development strategy 17
      
   3. 
      Limpopo agriculture and forestry summit 21
      
   4. 
      Limpopo agricultural development plan 24
      
   5. 
      Waterberg district LED 25
      
      1. 
         Bela-Bela 27
         
      2. 
         Mookgophong 28
         
      3. 
         Modimolle 29
         
      4. 
         Mokgalakwena 30
         
      5. 
         Thabazimbi 31
         
      6. 
         Lephalale 32
         

4. 
   OPPORTUNITY IDENTIFICATION 34
   

5. 
   RECOMMENDATIONS 38
   

1. 
   Status quo;
   
2. 
   Policy assessment;
   
3. 
   Opportunity identification;
   
4. 
   Scoping reports; and
   
5. 
   Implementation strategy.
   

The second prong, as explained below, was to verify data and fill any gaps by direct contact with industry roleplayers and representatives.

* Letlhakaneng 64ha smallholdings restored

* Moretele 1 966ha Cattle project restored

* Maureen 62ha Residential negotiations

* Bela-Bela 1 475ha ? Negotiatons

* Ramorula Community ? ? Further research

* Rooipan 1 484ha smallholdings restored

* De Hoop 678ha smallholdings negotiations

* Madisha 1 671ha agriculture negotiations

* Ga Aphane 1 239ha cattle & cropping negotiations

Table 3: Modimolle - Estimated agricultural production for 2004/5

* Modimolle 12 491ha agriculture, game and tourism partnership proposals

* Mabjaneng 3 706ha reserve business plan being compiled

* Legata 1 671ha reserve strategic partner secure

* Lebelo 3 600ha agriculture discussion with CSIR

* Koka Matlou 2 955ha cattle proposal from Strategic Partner

* Seema 1 848 cattle resolution of boundary dispute

* Lehutjo 838ha negotiations

* Molekwa further research

* Sindane 3 984ha negotiations
Table 5: Thabazimbi - Estimated agricultural production for 2004/5

* Baphalane 1 884ha cattle and lodge business plan being compiled

* Sebilong further research

* Motihabatse Community further research

* Mabula Mosima further research

Table 6: Lephalale - Estimated agricultural production for 2004/5

* Mosima 9 607ha reserve proposals invited

* Tale Ga Morudu 8 628ha reserve, cattle planning

* Morongwa 3 752ha game partially settled

* Motse further research

* Mokoena Community further research

* Majadibodu further research

* Matabane Community further research

* Mathole family further research

* Mokitlane further research

(Compiled from various sources. See references.)

1. 
   Cropping
   

Although named the Waterberg the district is actually classified as a semi-arid area with poor water resources. For crop farmers there have been dramatic changes in many commodity prices leading to changes in cropping patterns. Crops such as cotton, tobacco, maize and sorghum have been badly affected by low international prices and over production and plantings have been reduced significantly, often with negative financial and employment implications. Alternative crops like sunflower, wheat, soya beans, groundnuts and paprika are all internationally traded commodities and thus sensitive to the rand/dollar exchange rate. These crops therefore are limited substitutes. Lucerne appears to have some potential, especially with the movement towards game ranching, although demand is sensitive to seasonal conditions. Potato production also has some potential although entry is constrained by high input costs. In general there is little cropping that takes place without some form of irrigation. With demand on water resources increasing consistently crop farmers are going to have to examine their returns on the use of water in future.

• 
  Agriculture:
  

• 
  Cultural Industries:
  

• 
  Exports:
  

• 
  Information and Communication Technology:
  

• 
  Tourism:
  

Clusters are critical masses, spatially concentrated and of unusual competitive success in a particular field. They encompass an array of linked industries, from suppliers and providers of infrastructure to down-stream activities and service organisations. They also include training, research and governmental institutions. Competitive advantage within these clusters is driven not so much by the source and cost of inputs as by the productive use of inputs, which requires continuous innovation.

Middle and low-income countries have traditionally competed in the world market with cheap labour and natural resources. In order to move beyond this stage, the development of well-functioning clusters is essential.

Promoting cluster formation will require policy attention to issues such as:

• 
  Improving education and skills;
  
• 
  Provision of essential infrastructure;
  
• 
  Building capacity in technology;
  
• 
  Opening access to capital markets, and
  
• 
  Improving institutions / institutional efficiency.
  

Once a cluster begins to form, a self-reinforcing cycle promotes its growth. Clusters improve competitiveness by increasing productivity, by driving the direction and pace of innovation and by stimulating the formation of new business. It is therefore, the perfect context, within which to develop a strategy to promote economic growth, to create sustainable opportunities for local economic development and SMMEs; and to offer acceptable returns for investments in development.

Expansion of current production and the Memoranda of Understanding for new fruit and vegetable processing facilities that were signed at the Investor Conference (August 2003) should form the anchor projects for this cluster. The cluster value-chain should be extended up-stream to include the local production of inputs for the growing of selected fruit and vegetable commodities, such as plant material production, nurseries, pesticides and fertilisers (including organic fertilizers). The value-chain down-stream includes processing, packaging and exporting.

Public sector interventions include the commercialisation of state farms, rehabilitation of community irrigation schemes, skills development among emerging farmers and the encouragement of public-private partnerships with established commercial farmers. Improvements to logistical capacity and investment in plant biotechnology will also contribute significantly to increased competitiveness of this cluster.

Red and White Meat Cluster on all the corridors

This cluster should build on current and emergent cattle and poultry production, as well as animal-feed production, and should be expanded to incorporate under-utilised facilities such as state farms. Up-stream development opportunities include sorghum production by emergent farmers (a major substitute for maize), as a strategy to raise the competitiveness of animal-feed and meat production in Limpopo.

Down-stream activities should include improved efficiencies at abattoirs, as well as the packaging and distribution supply chain. The growing trend towards game farming in the Province could lead to the lucrative venison market being incorporated into this proposed cluster. Business plans that have recently been compiled for increased goat production in Limpopo also form part of this cluster.

Public sector interventions should include the commercialisation of state farms, skills development among emerging livestock farmers and the encouragement of Public-Private-Partnerships with established commercial farmers.

The following methodology was adopted for the analysis of the cluster value-chains since April 2004.

1. Illustrate the cluster value-chain graphically with the main production activity in the centre. Quantify the economic value and impact of the current main activity. Illustrate and quantify the existing links up-stream, in terms of inputs and services to the main production activity, and down-stream, in terms of value-adding activities.

(A process of integrated planning involving planners from local, provincial and national government, as well as outside stakeholders, was applied in developing the various cluster value-chains).

• 
  Working groups comprising government, labour and business should be established for each of the proposed cluster value-chains, in order to accelerate the cluster development process. Relevant districts and municipalities should be represented on the cluster working groups. These cluster working groups should have access to project management capacity and should be co-ordinated by an executive provincial cluster working group;
  

• 
  Infrastructure, including water, transport, electricity and ICT should be upgraded to improve integration, productivity and competitiveness within and across each cluster;
  
• 
  Education and training institutions should provide skills development programmes that contribute to improved productivity and competitiveness within each cluster;
  
• 
  Research and development should be increased to promote new product (opportunity) development and to improve competitiveness of the proposed clusters;
  
• 
  Investment promotion, LED project identification and provincial marketing should reflect the cluster priorities;
  
• 
  Business plans are required for each new development opportunity within every cluster and these business plans should reflect the issues raised above, as well as the proposed project contribution to job-creation, to SMME promotion, to gender issues and to Black Economic Empowerment;
  
• 
  These business plans should be incorporated into departmental strategic plans and IDPs at the district and municipal levels, and
  
• 
  In anticipation of the financing strategies that will have to be part of the business plans, a workshop is required to identify and deal with the issues that constrain access to finance in all sectors and across the entire spectrum of business activity from SMME to major corporate projects. The entire spectrum of financing institutions would therefore, need to participate in the workshop and in its resolutions.
  

• 
  Commitment from the broader stakeholders towards Provincial Growth and Development Strategy
  
• 
  Buy-in for building economies through the industrial cluster approach
  
• 
  Ensure commitment by industry towards relocation to Limpopo in support of (input/output) opportunities pertaining to the clusters
  
• 
  Ensure appropriate support by Government
  
• 
  Facilitate continued stakeholder co-operation towards implementation of various projects
  

Strategic Objectives

• 
  Creation of sustainable employment
  
• 
  Ring fencing SMME opportunities
  
• 
  Enhance economic growth
  
• 
  Poverty reduction
  
• 
  Increased investment and exports
  
• 
  Identification of infrastructure/ logistics needs and improvements
  

• 
  There must be Improvement of training and skills transfer through extension programmes, structured training and mentoring
  
• 
  There must be Improvement of resource conservation especially water.
  
• 
  There must be improvement of market access mechanisms
  
• 
  AGRI-BEE must be promoted
  
• 
  Infrastructure development mainly by government, should be fast tracked
  
• 
  Farmer Organisations must be strengthened
  
• 
  There must be more focus on the business side of Agriculture
  
• 
  Developing farmers need programs to ensure they can participate all along the value chain.
  
• 
  The formation of a Poultry Association in Limpopo
  

• 
  Co-ordination between all levels and departments in government is needed and a cluster working group around Livestock and another around grains, should be created. The tasks of these groups in the short term will be as follows:
  
  • 
    To evaluate, plan and implement essential water, fencing, electrical and other necessary infrastructure.
    
  • 
    To review commodity pricing linked to trade protection for commodity products
    
  • 
    To set in place a program for all livestock to improve the genetic stock of the stock
    
  • 
    To set in place Joint Ventures between commercial farmers and small farmers
    
  • 
    To re-introduce the system of extension services support for small farmers
    
  • 
    To educate rural and communal farmers around the shift from viewing livestock as wealth, to viewing livestock as productive assets
    
  • 
    To optimise the goat industry in Limpopo
    
  • 
    To facilitate improved pig production in the province so that imports can be stopped.
    
  • 
    To assist in the fast tracking of the Land Reform process.
    
  • 
    To develop and support the implementation of skills development all along the value chain for emerging and new farmers.
    
  • 
    To support the set up of an Advice Call Centre for developing farmers.
    

Same as that resolved for livestock, with the addition of:

• 
  Specific plans for access to Water
  
• 
  Specific pro active plans with deadlines and targets for access for women to agriculture since in Limpopo most of the agriculture is undertaken by women.
  
• 
  Champions are needed for all the initiatives.
  

• 
  There must be linkages between supply issues and funding mechanisms for resource poor farmers. This will require financial engineering to develop case studies on 2 or 3 existing projects such as LRAD, Greenfields, Land Restitution.
  
• 
  These case studies should be discussed with all parties with the aim of addressing market integration issues in a round table discussion with business and government.
  
• 
  As the outcome of this process a Financial Summit should be held before July 2005 to present the outcomes of the case work as well as input from financiers on how to tackle the issues.
  

• 
  There needs to be a plan and a mechanism for continuous information sharing between established and developing farmers.
  
• 
  Extension officers must be made available again to assist developing farmers.
  
• 
  Other types of partnership models must be explored to advance the agricultural sector, for example, Management buy outs. The model must review the entire value chain.
  
• 
  A comprehensive analysis of the various value chains must be undertaken so that access to markets can be addressed.
  
• 
  Government must seek mechanisms for facilitate market access for developing farmers.
  
• 
  Agricultural processing done outside the province must be relocated inside the province and a specific plan of action must be developed for this and presented at the Provincial summit.
  
• 
  Government must fast track the privatisation of tribal land and set itself tough targets in this regard.
  

4. 
   Limpopo Agricultural Development Plan
   

Key strategic programme areas:

1. 
   Restructuring of state assets through RESIS and ARDC
   
2. 
   Promotion and implementation of AgriBEE
   
3. 
   Succession planning based on youth infusion in the agricultural sector
   
4. 
   Development of appropriate research based agricultural technologies
   
5. 
   Redistribution of agricultural land, capacitating beneficiaries and promoting sustainable enterprises
   
6. 
   Poverty alleviation through food security and nutrition
   
7. 
   Establishment of reliable communication technology
   
8. 
   Formation of farmer based commodity associations
   
9. 
   Provision of advisory support
   
10. 
    Promotion of sustainable land use management
    
11. 
    Animal production, health improvement and eradication of animal disease
    
12. 
    Human resource development
    

Support government objectives of:

• 
  Growing the economy
  
• 
  Job creation
  
• 
  Economic empowerment
  
• 
  Poverty alleviation
  

Through the following participatory demand driven/led approaches:

• 
  Municipality focused
  
• 
  Commodity based
  
• 
  Value chain analysis
  
• 
  Project based
  

Which will lead to the following key outcomes:

• 
  Revitalisation of smallholder irrigation schemes (RESIS)
  
• 
  Preparation of integrated agricultural plans
  
• 
  Preparation of an appropriate mechanization support policy
  
• 
  Management of agriculturally related risk
  
• 
  Establishment of appropriate marketing information and statistics
  
• 
  Improved food security and income generation
  
• 
  Farmer support services that are accessible to clients
  
• 
  Funding support that is mobilized and coordinated
  
• 
  Properly managed animal health
  
• 
  Land accessibility
  
• 
  Tenure security for farmers on communal land
  
• 
  Post transfer production support to land beneficiaries
  
• 
  Efficient management and administration of state land
  
• 
  Economic growth through sustainable land reform
  

• 
  increase the district economic growth;
  
• 
  reduce the level of poverty and unemployment;
  
• 
  increase participation of previously disadvantaged individuals and communities in the mainstream economy; and
  
• 
  develop a well established human resource capital.
  

Bela-Bela makes up just 7% of the Waterberg District and in 2001 contributed less than 1% to the District GGP. With some agricultural projects like day-old chick production, broilers and crocodiles having been established in the last few years it is likely that the area now contributes considerably more to the GGP. Bela-Bela influence on the district economy, however, remains limited. This is reflected in the IDP of the local municipality. No specific agricultural projects have been identified although emphasis has been placed on job creation projects. From the map above it is clear that there are several land claims in the area which would require the attention and involvement of the Municipality.

Mookgophong makes up 9% of the district area. It contributes over 18% to the districts GGP and 23% of the local economic activity comes from agriculture. Agricultural activity is, in no small part, responsible for this economic activity. A number of opportunities have been identified in the agricultural sector although the LED refers to only four agriculturally related activities:

1. 
   Verifying the status of land claims and land reform projects ;
   
2. 
   Improve agricultural perceptions and training to improvement employment of local labour;
   
3. 
   Establish an agricultural training centre at Crecy; and
   
4. 
   Dipudi (goat) project.
   

1. 
   Paprika production under irrigation;
   
2. 
   Expansion of citrus production (Nyl/Mokgalakwena);
   
3. 
   Spices (Nyl/Mokgalakwena);
   
4. 
   Granadillas (Nyl/Mokgalakwena);
   
5. 
   Meat processing (Naboom);
   
6. 
   Hydroponics (Springbok flats); and
   
7. 
   Tambotie Floodlands – Game
   

Modimolle makes up 13% of the District area and contributes almost 7% to the district GGP. Of the economic activity around 18% results from agriculture. From the map it is clear that there are few land claims and fewer LRAD projects. Several projects and priorities have been identified for the area. These include:

1. 
   Alma Hydroponics;
   
2. 
   Meropa vegetables;
   
3. 
   Waterberg Agricultural Training Project;
   
4. 
   Limpopo Dipudi Project (Goat abattoir);
   
5. 
   LDA Leseding Poultry Project (Vaalwater);
   
6. 
   Various poverty alleviation projects – Busy Bee (aquaculture), Bokamoso (poultry) and Metsematala (vegetables);
   
7. 
   Organic vegetables and beef;
   
8. 
   Community game farm projects; and
   
9. 
   Processing of venison.
   

Mokgalakwena makes up 12% of the district area. The area contributes 11% to the district GGP with 10,4% of the local economy attributed to agriculture. The municipality IDP identified a number of local issues needing attention. Of these the following had an agricultural bias:

1. 
   agricultural development;
   
2. 
   tourism strategy; and
   
3. 
   labour intensive projects.
   

In particular two projects were identified in the LED strategy:

1. 
   Chicken abattoir;
   
2. 
   Mokamole Agricultural Farm.
   

Thabazimbi makes up 20% of the area district. It is an important contributor to the economy. In terms of agriculture almost 40% of the districts agricultural activity is generated in Thabazimbi and the sector employs 22% of the labour in the area. Although mining and agriculture are the dominant sectors, cultivation (cash crops and horticulture) is generally on the decline. The exception to this trend is hunting and eco-tourism.

In the LED various opportunities have been identified and translated into priority areas to be given attention. These are some of those identified areas:

1. 
   Lack of erven and land for community projects (training in agriculture);
   
2. 
   Stimulate the production of horticultural products (training in agriculture);
   
3. 
   Marketing of the Waterberg Biosphere (malaria free, proximity & accessibility, safety) ;
   
4. 
   Stimulating exports to Botswana;
   
5. 
   Improving the utilization of game ranches out of season (including de-bushing and feed manufacture);
   
6. 
   Game processing plant/industries (spin-off of hunting); and
   
7. 
   Encouraging the mines to buy locally.
   

Lephalale is the largest municipality in the district and accounts for 39% of the district. The area contributes to 26% of the district GGP while in the area, the agricultural sector makes up 30% of the local economy. This is a large area with a lot of potential. The Waterberg Biosphere plays a major role in the area and with extensive livestock and hunting, there is identified scope in the eco-tourism industry. There are a number of envisaged LED projects. Of these there are number linked to agriculture:

1. 
   Land restitution project;
   
2. 
   Tourism project; and
   
3. 
   Agricultural programme
   

Within these projects and programmes there are a number of Limpopo Department of Agriculture, LRAD, and community projects. Those identified include:

1. 
   De-bushing project at Shongoane;
   
2. 
   Commercialisation of D’Nyala;
   
3. 
   Marula project at Steenbokpan;
   
4. 
   Marapong Paprika project at Marapong;
   
5. 
   Rooigrond commonage at Refilwe (cattle and goats); and
   
6. 
   Seed nursery at Madibaneng.
   

4. 
   OPPORTUNITY IDENTIFICATION
   

From the data that has been gathered, and discussion with roleplayers and stakeholders in the industry, the following possible opportunities have been mentioned or may have merit for further investigation.

1. 
   Feedlot and abattoir - Thabazimbi/Lephalale for processing (pork?), beef and venison for exports
   
2. 
   Feed mill – Mokgalakwena
   
3. 
   Maize and sorghum for ethanol
   
4. 
   Eco-tourism – all local municipalities
   
5. 
   Game lodge development for all categories – movement from cattle to hunting and eco-tourism
   
6. 
   Upgrading of existing reserves
   
7. 
   Game trails – horse and walking
   
8. 
   Cultural eco-tourism in the Waterberg escarpment
   
9. 
   Bio-sphere – involved in all eco-tourism initiatives. Expansion in the future.
   
10. 
    Specialized horticulture – essential oils, organic farming, herbs and spices, wild flower production/harvesting (wide variety of micro-climates in and around Waterberg)
    
11. 
    Wild and cultivated nuts and nut oils
    
12. 
    Bee-keeping – small farmer development
    
13. 
    Foodplot development in relevant areas to supply game lodges
    
14. 
    Poultry production – eggs and meat to game lodges
    
15. 
    Game/cattle operations on LRAD and Settlement projects – no interest on debt
    
16. 
    Guar beans – replacement field crop
    
17. 
    Cassava – starch and animal feed
    
18. 
    Dairy goats or small specialized cattle dairy – milk and other dairy products
    
19. 
    Goat meat – young meat for export
    
20. 
    Soya beans – replacement field crop and animal feed
    
21. 
    Absent Farmer Syndrome – partnership with local inhabitants/communities to use under utilized land
    
22. 
    Breeding of rare game species
    

5. 
   RECOMMENDATIONS
   

Based on the policy analysis and identified potential opportunities, it is recommended that focused attention be given to identifying opportunities in the following value chains:

• 
  The horticulture value chain;
  

• 
  The meat production value chain; and
  

• 
  Agri-tourism value chain
  

These opportunities will have particular relevance to BEE opportunities and will therefore need to focus on incorporating LRAD and Restitution projects, and adjacent disadvantaged local communities.