Big boost for small growers

2011-03-30 00:00

SUGAR cane production in the Sezela region of the South Coast is set to increase by about 180 000 tons per annum with a current value of about R60 million as a result of a project named Sizanayo, targeted at small cane growers.

It is a joint partnership between Standard Bank South Africa Limited, Illovo Sugar (South Africa) Limited and the Sezela Cane Growers’ Association.

The two-pronged initiative involves rehabilitating about 2 000 ha of existing land under cane and planting an additional 2 000 ha of new land to cane.

The project It will directly benefit around 4 000 small-scale growers in the area.

The project is the first of its kind in the South Coast sugar industry, and is forecast to provide around 750 permanent jobs and significant economic development of this rural area.

The financial multiplier effect is considered to be five times the investment.

Unlike previous small-scale grower development models, the Sizanayo project hinges on the active participation of every farmer involved, supported by all three partnership members, other industry role-players, the national and provincial governments, and a unique personal mentorship programme enlisting the experience of large-scale growers and private cane contractors.

The ambitious project is planned to reverse the dwindling cane supply in the South Coast. Sugar cane production for Illovo’s Sezela sugar mill from small-scale growers alone has declined by almost 62% from 260 000 tons in the 2000/01 season to around 80 000 tons.

Combined with reduced cane supplies due to other factors, notably this season’s severe drought, the long-term sustainability of the industry in this region is being sorely tested.

This project, with other initiatives, is seen as a crucial intervention to stabilise the industry and put the South Coast on a steady growth path.

The key to unlocking the project has come from Standard Bank agricultural banking, which, through its black economic empowerment fund, has made a R60 million loan and developmental finance available to be used for the rehabilitation of existing canefields and the establishment of new land under cane respectively.

The uniqueness of this programme is that Standard Bank and the other stakeholders have created a financing package for a sector previously deemed “unbankable”.

The initial programme will run for a period of five years, with cane profits ploughed back into the grower operations to ensure long-term sustainability, while ensuring a fair return for growers.

Illovo and Sezela Cane Growers’ Association are providing subsidised seed-cane, financed via the South African Sugar Association’s grower development account, while the Sezela Sizanayo finance and small scale grower committee will give support by standing good for any first loss due to bad debts on loan repayments, up to an amount capped at R1million.

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