by Prof Naftali Mollel
Despite impressive economic growth over the last 15 years, South Africa’s Limpopo Province is still characterised by high levels of unemployment and poverty. An innovative programme underpinned by research done at the Agricultural Research Council, Nguni Breeders’ Society and the University of Limpopo can help stimulate the economy by creating a substantial number of new jobs.
The Limpopo IDC Nguni Cattle Development Programme (download pdf) entails the production of beef through the entrepreneurial development of rural cattle farmers into beef producers across the whole beef production value chain.
An initiative of the Limpopo government in partnership with the Industrial Development Corporation (IDC) and the University of Limpopo, the programme initiates rural farmers into the mainstream beef production industry by upgrading cattle in the rural areas by reintroducing indigenous Nguni bloodlines through the university. How it works in practice is that farmers are loaned 30 pregnant heifers and a bull and have to pay back the loan by providing the same number of heifers and a bull as progenies of the initial herd within a five-year period. Some farmers have been so successful that they have been able to pay back the loan within two-and-a-half years.
The partners formed the Limpopo IDC Nguni Cattle Development Trust as a vehicle for the implementation of the programme. Since 2006, when the pilot phase began, 44 successful projects have been established and there has been wide uptake of the programme in the province. The beef-production industry is volume based. To introduce rural farmers into the beef production industry and integrate them right through the beef-production value chain, the programme now has to be expanded. The massification of the programme will contribute to poverty reduction in the area by developing an integrated, differentiated and competitive beef-production industry.
A large number of communal cattle farmers have organised themselves into various cattle-farmer associations, which provide platforms for collective action in advancing common interests. These associations will in future be upgraded into cattle farmers' cooperatives. The cooperatives will be established in such a way as to enhance chances of success by eliminating the traditional weaknesses of cooperatives. In fact, a number of the successful cattle farmers' associations are already operating as cooperatives.
The massification project has three main stages, namely the backgrounding stage, the feedlot stage and the slaughtering stage. It is estimated that at least 5 500 direct jobs will be created at the primary production level. An additional 400 jobs are estimated to be created during the backgrounding and feedlot stages of the production process. These figures exclude jobs that will be created at the supporting industry levels in the value chain. The massification project will also create further opportunities in meat processing, turneries and distribution channels.
South Africa has seen an increase in demand for beef, creating a shortage estimated at 340 000 cattle a year. Communal farmers in Limpopo own more than 720 000 heads of cattle, but they’re mostly excluded in the beef production industry, largely as a result of substandard farming methods. The gap in the market is sufficiently large and provides opportunities.
The success of the pilot phase of the programme caught the attention of other roleplayers in the beef production value chain, including one of the country’s largest supermarket groups, which opens up further possibilities. Its ongoing success will be enhanced by the judicious selection of entrepreneurs.
A framework for monitoring and evaluation has been developed, with self-sustainability and outreach being the two main outcomes to determine the success of the programme. Financial success will be measured by the extent to which operating costs can be recovered, the value of resources preserved and grown, resources mobilised and reliance on subsidies minimised. Uptake will be measured by the spread of beneficiaries and size of assets. Cattle farmers and entrepreneurs in the beef-production value chain constitute the primary stakeholders. Other stakeholders are government, research institutions, financial institutions and institutions for collaboration.
By holding a common vision for the Nguni Cattle Development Programme in Limpopo, all the stakeholders contribute to developing social capital in the province.
Prof Naftali Mollel is the Director of the Rural Development and Innovation Hub and DRUSSA Leader at the University of Limpopo.