Opportunities for social and economic development through Agroforestry Mabandla Case study Economic empowerment and development through timber Jeanette Clarke Independent Forestry Consultant

Introduction South Africa has a semi-arid temperate climate “Typical” agroforestry systems associated with the humid tropics are inappropriate However, forests, trees and plantations play a crucially important role in rural farming systems and rural livelihoods

Agroforestry SA-style: addressing rural poverty and unemployment through timber plantations Mabandla Case Study uMzimkhulu Timber plantations as a catalyst for rural employment and wealth creation Forestry profits invested in new businesses – economic integration between trees and other land use activities Integrated rural development and economic empowerment with forestry at the centre Industrialisation: sawmill and wood products manufacturing capacity

uMzimkhulu forestry – the beginnings Extensive areas with high afforestation potential identified in uMzimkhulu LM Community-industry partnership discussions began in mid-1990s initially with support from Mondi Independent support agency Rural Forest Management (RFM cc) formed to continue the program Interest from local leaders to embark on commercial forestry business ventures – initially 10, but of those 3 communities established plantations Mabandla Zintwala Ngevu

uMzimkhulu forestry – the beginnings Pre-planting support: Community Trusts and Companies set up for ownership and business management functions Technical and business planning phase Access grant and loan funding (SLAG and Land Bank) Plantation establishment 2000 -2006

Mabandla forestry – the journey Mabandla forestry the most successful of the three Largest plantation area: 1320 ha plantation of Eucalyptus and Pine First harvest 2008 120 full time jobs Turnover R12 million / annum Self sustaining covering all operating costs and makes a profit of over R1 m SLAG grant covered 80% of establishment costs – key to early profitability Community Trust decision to re- invest profits from timber sales in new business ventures Sawmill Agri-processing Ecotourism Training

Financed by Umgano DevCo and IDC R1.4 million loan Sawmill opened July 2016 Financed by Umgano DevCo and IDC R1.4 million loan Employment- 24 jobs initially Value add sawlog unprocessed R600/ m3 Saw timber R2200 /m3 Next step in value addition – milling plant R4000/m3 Improved Market Access Zweli Baleni Umgano DevCO CEO Photo credit: SA Forestry

 7 000 ha of pristine indigenous forests and grasslands, two major rivers 1 500 ha Nature Reserve managed partnership with Ezemvelo KZN Wildlife Significant ecotourism potential

http://www.ecoadventure.co.za/

Skills training for employees of Umgano companies Education and training needs of broader community External training for additional revenue Discretionary grant funding FP&M Seta

Currently in advanced planning stage- EIA underway 140 ha vegetable farm and processing facility – 320 jobs Projected turnover R17 m 300 ha hazel/pecan nut orchards 500 head of dairy cattle

Opportunities for social and economic development through agroforestry New Afforestation Area with forestry potential: Eastern Cape 100 000 hectares KZN 40 000 hectares Plantation recap DAFF commercial plantations Some 80 000 hectares in prime forestry areas – majority on TC land Currently degraded & unproductive How replicable is the Mabandla case?

Mabandla success factors Strong, visionary and uncontested leadership at Community level Community ownership and control Competent and committed partners and mentors – 20 year support from RFM now Umsonti Rights to large area of productive land Grant funding for project preparation and establishment phase Commercial loans from IDC Investment in capacity building

Policy lessons and challenges Planning and establishment grants are essential for new afforestation given the delay between planting and harvesting timber SLAG grants covered 80% of establishment costs at Mabandla The profits from timber sales invested in new businesses, creating more revenue and employment In VAT alone, the grant has been repaid to government many times over Afforestation Grants ARE NOT YET AVAILABLE FROM GOVERNMENT!

Policy lessons and challenges Grant finance also required for business start-up. Without a cash portion interest on loans too high for profits in short to medium term - applies to all Umgano businesses Access to loan finance on good terms (IDC forestry program)

Policy lessons and challenges Expedite water use licensing DAFF plantation transfer and recapitalisation grants Training support - important role of SETA discretionary grants Institutional oversight and strengthening in TC areas Land tenure reform in TC areas

Acknowledgments Mabandla TC leadership, Community Trust and beneficiaries Umgano DevCo Zweli Baleni, Mayford Jaca Peter Nixon, Themba Radebe and James Ballantyne (Umsonti) IDC