PRESENTED BY: ZINHLE FAITH DLAMINI TUNIS, TUNISIA NOVEMBER 2012

The Sugar Industry in Swaziland 2 nd 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 FINANCEDGOVT FINANCED SELF FINANCED NO. OF FC’S AREA UNDER CANE DIRECT BENEFICIARIES

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 APPROACH The 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 ROLES STAKEHOLDERROLES GROWERSLarge 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’ STAKEHOLDERROLES SWADEA government company established to facilitate the planning and implementation of large water and agricultural development project that Govt may assign. FINANCIERSProvide loans to FC’s MEPDPresent 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 reduced Develop farm plans, review and approval of irrigation designs and business plans Prepare tender documents Supervise works-contractors conformity to quality standards, then commissioning Financial overview

Technical training in irrigation Training in irrigation management Mentoring on system management Long term support and mentoring

2. Smallholders farms are competitively managed as businesses Preparation of business plans Conduct Business and Training needs assessment Design and implementation of business planning and management planning Conduct trainings Contract 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

SUCCESSES Registration as farmers companies “Land rights” acquired 30 DESIGNS APPROVED 30 BUSINESS PLANS APPROVED 24 FC’s developed (1788 ha), 6 more (584ha) being developed Business development trainings conducted Irrigation management trainings conducted Business management systems and structures in place Adherence to statutory requirements Mentoring and coaching going on well Harvesting groups in place- economies of scale Weaning 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’S Other businesses- diversification, supply of farm inputs Infrastructure development WEANING OF FC’S

CHALLENGES High interest rates Lack of trust Key cost drivers high- labour, energy, haulage Poor management of farms Land ownership issues- social Poor contracts management Taxes?????

Conclusion 70% 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??????

SIYABONGA THANK YOU