AGRICULTURAL NEWS - The recently unveiled Ikamva Lethu black economic empowerment project in the citrus-rich Sundays River Valley in the Eastern Cape aims to radically transform how future empowerment deals in the agricultural sector are handled.
The difference between the newly launched Ikamva Lethu empowerment project and other failed agricultural empowerment deals is the collective, long-term buy-in by both land owners and previously disadvantaged members of the community working on farms in the region, say originators of the project.
Initiated by the Sundays River Citrus Company (SRCC) which represents about 10% of South Africa’s citrus industry and around 45% of the citrus coming from the Sundays River Valley, the Ikamva Lethu project – Xhosa for “our future” – is earmarked for about 700ha of farmland in the area. This is part of a 1,200ha tract of farmland which has been purchased and registered by the SRCC.
The first significant milestone has been the recent allocation of a water licence by the provincial Department of Water and Sanitation, allowing the farm to draw 675ha equivalent of water from the Sundays River Irrigation Scheme for the irrigation of citrus plantations.
An environmental impact assessment (EIA) application for the development of the farmland – which at present is just bush – has now been submitted to the Department of Environmental Affairs, with authorisation for the project expected towards the end of 2017. The EIA will determine the exact amount of land which will be cultivated.
Major empowerment deal
Ken Nieuwenhuizen, SRCC director of transformation and development, explained the magnitude of the Ikamva Lethu project: “To put it into perspective, the valley is one of the major players in the SA citrus industry and there are about 150 citrus farms here covering around 12,000ha in total,” said Nieuwenhuizen. “So already we are looking at possibly the largest empowerment deal in the citrus industry in the country – and one of the biggest farming enterprises in the valley, when it is fully realised.”
The knock-on effects of the project for the growth of downstream industries – from transport and logistics to storage and packaging – were significant, he said.
Explaining the origins of the deal, Nieuwenhuizen said SRCC was guided by the National Development Plan (NDP).
“Ikamva Lethu is very broad-based; it’s about inclusivity and participation. It will result in about 400 community members becoming shareholders and beneficiaries, and benefiting from the success of the project,” he said.
A suggested guideline in the NDP pertaining to land reform, empowerment and transformation within the agricultural industry is that 20% of farming enterprises be transferred to farm workers, with the farmer or landowner retaining ownership of half of the shares (10%).
“We wanted to use that as a guiding principle for our project. We want to share the success of the industry with the people who have been living and working on those farms for many years,” said Nieuwenhuizen. “For us as SRCC, it is a way of being proactive within the empowerment and transformation field.”
Shareholding
The premise of the Ikamva Lethu project is that SRCC farmers wanting to empower their farmworkers can purchase shares in the project equivalent to up to 20% of their own farming enterprise. Half of the shares would be held by the farmer, and the other half would be held by his permanent farm workers within a trust established for this purpose, said Nieuwenhuizen.
“The workers will continue to work for the farmers on their [separate] farming operations, but will own 50% of the investment made in Ikamva Lethu,” he said.
