PRESENTED BY:ZINHLE FAITH DLAMINI

TUNIS, TUNISIANOVEMBER 2012

The Sugar Industry in Swaziland•2nd largest employer after govt•Contributes 18% to GDP•Large scale (Millers and Estates) and smallholder growers (FC’s and Associations)•About 50, 000, ha of land under sugar•122 Smallholder growers in total

SMALLHOLDER FARMERS EU FINANCED GOVT

FINANCEDSELF FINANCED

NO. OF FC’S 30 16 72

AREA UNDER CANE

1788 1211 6977

DIRECT BENEFICIARIES

1148 948 3983

WHAT WERE THE MAJOR CHALLENGES?• Low yields and high production costs-

poor husbandry practices, insufficient and/or late application of farm inputs

• Irrigation system management- no

maintainance, poor irrigation scheduling

• High operating costs- transportation/haulage costs, electricity, fertiliser and labour costs

MAJOR CHALLENGES contd’• Debt servicing-high initial capital costs,

inappropriate repayment schedules, high interest rates

• Non availability of working capital- poor

performing loans background, banks delayed provision of operational loans or lesser amounts

• Poor Management of farms and social conflicts- Rapid turnover in leadership, unwillingness of members to undertake activities, unrealistic expectations- loans for dividends

THE PROJECT AND APPROACHThe EU provided financial assistant as a grant

amounting to 70% of each Farmer Company's development costs in the first year.

Farmer Companies were expected to source a Loan amounting to 30% for the operational costs in the first year.

SHIP was tasked with giving technical assistance to farmers i.e. Supervising works and providing trainings, coaching and mentoring

STAKEHOLDERS AND THEIR ROLESSTAKEHOLDER ROLES

GROWERS Large scale (Millers and estates) and small scale (Smallholders and individual) growers

SWAZILAND CANE GROWERS ASSOCIATION (SCGA)

Mother body of all cane growers tasked with managing growers affairs

MILLERS •Grow own cane, buy and crush sugar cane from growers to produce sugar•Also provide extension services through the Out-grower departments

SWAZILAND SUGAR ASSOCIATION (SSA)

Provides services necessary for the development of the sugar industry and the marketing of sugar

STAKEHOLDERS AND THEIR ROLES CONTD’STAKEHOLDER ROLES

SWADE A government company established to facilitate the planning and implementation of large water and agricultural development project that Govt may assign.

FINANCIERS Provide loans to FC’s

MEPD Present government and coordinate the National Adaptation Strategy

AID COORDINATION AND MANAGEMENT SECTOR (ACMS)

Provides technical assistance to the MEPD

EUROPEAN COMMISSION (EC)

Implements the National Adaptation Strategy

WHAT IS BEING IMPLEMENTED BY SHIP?Two major development goals

1.Investment and capital costs are reduced for sugar cane growing small holders

1.Smallholders farms are competitively managed as businesses

1. Investment and capital costs are reducedDevelop farm plans, review and approval of

irrigation designs and business plansPrepare tender documentsSupervise works-contractors conformity to

quality standards, then commissioningFinancial overview

Technical training in irrigationTraining in irrigation managementMentoring on system managementLong term support and mentoring

2. Smallholders farms are competitively managed as businesses

Preparation of business plansConduct Business and Training needs

assessmentDesign and implementation of business

planning and management planningConduct trainingsContract specialist service providers to assist

FC’s

Smallholders farms are competitively managed as businesses contd’

Provide assistance to Farmer Company management (Trainings, Systems and structures)

Foster linkages between private sector service providers and FC’s

Monitor Management performance of FC’s Ensuring Statutory requirements are met

SUCCESSESRegistration as farmers companies“Land rights” acquired30 DESIGNS APPROVED 30 BUSINESS PLANS APPROVED24 FC’s developed (1788 ha), 6 more (584ha) being

developedBusiness development trainings conductedIrrigation management trainings conductedBusiness management systems and structures in placeAdherence to statutory requirementsMentoring and coaching going on wellHarvesting groups in place- economies of scaleWeaning of 3 FC’s and 7 set to be weaned in January

IMPACT and BENEFITS- 13 FC’S• Improved productivity of farms- from 100 to 115

tch• Proper management of farms-systems and

structures • Improved debt/loan management- from 6 to 2 or 3

years• household income increased- from 90 to 300 €• Availability of working capital –from proceeds• Maintained irrigation system• Operation costs manageable• Willingness of financiers to give out loans

IMPACT and BENEFITS- 13 FC’SOther businesses- diversification, supply of

farm inputsInfrastructure developmentWEANING OF FC’S

CHALLENGESHigh interest ratesLack of trustKey cost drivers high- labour , energy,

haulagePoor management of farmsLand ownership issues- socialPoor contracts managementTaxes?????

Conclusion70% or no 70% grant Is the grant enough to ensure sustainability in

Agriculture Growth?100 % debt financed……….are the trainings,

mentoring and coaching enough to ensure sustainability?

Low productivity, indebtedness, high operational costs, unavailability of working capital and poor management of farms…..has/is the project addressing this?

TO THE FUTURE??????

SIYABONGATHANK YOU