Lynette BezuidenhoutManaging Director

The impact of Agri Rural Community development:

A REALITY CHECK

“Funding Local economic development projects as engines for community transformation and innovation”

ContentContentWho is MASDT?

What entails the Agricultural Rural Community development chain?

Analysis of MASDT Rural Community projects

Reality check

Impact and Performance

Challenges

Who is MASDT?Who is MASDT?Founded in 2005

Changed to Non-Profit Company in Dec 2006Incubation Donor Founder – Seda 2007

Current Funders Seda – Incubation

British American Tobacco (BAT SA) – Mixed Farming IncubationEskom Foundation – Incubation AssetsDTI – Incubation Support Program (ISP)

National Development Agency (NDA) - IncubationAgriSETA – Virtual College

Inzalo Trust– Women’s Garden Projects (Utah)Monsanto SA – Maize Seed

Hannah Trust – Pre-primary School Feeding Scheme (Bushbuckridge)Public Investment Corporation (PIC) – Tunnel for Feeding Scheme

MASDT staffMASDT staffMentors

Mentors

Health & Safety Audit (NOSA)Health & Safety Audit (NOSA)

BBBEE AuditBBBEE Audit

Seta AccreditationSeta Accreditation

External Financial AuditExternal Financial Audit

External PFMA AuditExternal PFMA Audit

External (Internal) AuditExternal (Internal) Audit

ISO AuditISO Audit

Laboratory accreditationLaboratory accreditation

Compliance AuditsCompliance Audits• Change rural people’s lives for the better

• Taking agri supporting services to the rural

areas

• Add value through nationally recognised

training

• Nurture emerging farmers to successful small

or commercial farmers in rural areas

(Incubation)

MASDT Visionary Framework MASDT Visionary Framework

MASDT AchievementsMASDT Achievements

CredentialsCredentials

BUSINESS MODELBUSINESS MODEL

Potential Farmers/

Land Reform

projects in rural areas

NATIONAL CERTIFICATES

or SKILLS PROGRAMS

Governance, leadership and management training

AGRI INCUBATION

SUSTAINABLE SMALL

ENTERPRISE

SUSTAINABLE COMMERCIAL ENTERPRISE

3 Year intensive enterprise development

Evolve to Incubation

Availability to land &

water

NATIONAL CERTIFICATE: New Venture Creation for

an Agri Business

NQF 2

What entails the Agriculture Rural What entails the Agriculture Rural Community Development ChainCommunity Development Chain

VALUE CHAIN

Small-Scale farmers>5ha ± 75 000<0,5ha ± 165 000

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Perishable Product

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FARMING FINANCE FACTSFARMING FINANCE FACTSCost/ha Maize Cabbage Carrots TobaccoInputs 6 780 23 049 13 874 35 000Labour 300 8 700 8 000 34 000Marketing 1 600 7 364 10 382 1 000TOTAL A 8 680 38 413 32 256 70 000

Plants/ha 28 000(dry land) 40 000 2m 22 000

Price/ton B 1 500 920 2076 32 000

AVE yield C 6.5 t(?) 60 t(?) 25 t(?) 2.5 t(?)

Gross margin 1 070 16 787 19 644 10 500(BxC)-A

• Business man Marketer• Financial expert HR manager • Mechanic Agronomist • Plant health expert Soil expert • Veterinary surgeon Record-keeper• Breeder • Forage expert • Weather predictor, etc....

KNOWLEDGE set OF A FARMING KNOWLEDGE set OF A FARMING BUSINESS OWNERBUSINESS OWNER

VIRTUAL BUSINESS INCUBATIONVIRTUAL BUSINESS INCUBATIONFarming is by its very nature a complex and high-risk business, therefore MASDT provide a comprehensive support package throughout the agriculture value chain that include:

Accredited trainingGovernance, leadership and management trainingTechnical assistance in agronomy and animal production skillsBusiness and entrepreneurial skills and supportSustainable Farm planning and budgetingMarket linkagesRecordkeepingSubsidized mechanical assistance (tractors and implements)Procurement, transport and delivery of goodsFormal Mentorship programSubsidized laboratory testing in soil, water and leaf analysis Basic science laboratory for training purposes to emerging farmers and scholars

VIRTUAL BUSINESS INCUBATIONVIRTUAL BUSINESS INCUBATION

• Operations:– Mobile in taking supporting services to the rural areas

– 1 Business Development Officer per region supports

maximum 30 Emerging Farming Businesses

– Bi-weekly face-to-face visits

– Monitor and verify monthly turn-over and job creation

– Inherit the challenges and problems

VIRTUAL business incubationVIRTUAL business incubation

• Exit criteria

– 3 Years of full-time Incubation

– Successful assessment of farming venture

– Job creation and economic growth

– Turn-over consistent for at least 3 production cycles

– Trading and making a profit

– Recordkeeping

– Operates independently

Dissection of MASDT Incubation Dissection of MASDT Incubation projectsprojects

Bushbuckridge

UTHA

Hazyview

Nkomazi

Piet Retief Area

Badplaas Area

Sekhukhune District

Nelspruit

Standerton Area

Bethal/Ermelo Area

SEDA UNITSEDA UNIT±180 Clients/Projects

Mpumalanga, Limpopo

Rustenburg

Johannesburg

Groblersdal Project

Venda Project

Buffelspruit Project

Skuinsdrift Project

Oudtshoorn Project

Elandskraal Project

BAT UNITBAT UNIT

±100 Farming Units±100 Farming Units

Mpumalanga: Buffelspruit, Badplaas, Steynsdorp,

Limpopo: Groblersdal, Elandskraal, Venda

North West Province: Skuinsdrift,

Western Cape Province: Oudtshoorn

Badplaas/ Steynsdorp

Rustenburg

Johannesburg

Kosi Bay

Groblersdal

Kranskop

Piet Retief

DTI ISP UNITDTI ISP UNIT

4 Communities Mpumalanga = 165

Limpopo = 32KwaZulu-Natal = 975 + 247

TOTAL BENEFICIARIES = 2903

A reality checkA reality check

Seda Incubation - ParticipantsSeda Incubation - Participants166 Clients

Gender:

400 Women + 94 Youth

300 Men + 75 Youth

+700 beneficiaries

Ownership:

42 Cooperatives

8 Pty (Ltd)

2 NPO’s

17 CC’s

1 Trust

5 CPA’s

166 Clients

Language:

siSwati 37%

sePedi 29%

isiZulu 16%

Xitsonga 14%

seSotho 2%

sisXhosa 1%

sisNdebe 1%

BAT Mixed Farming Incubation - BAT Mixed Farming Incubation - ParticipantsParticipants

Ownership•Private•Communal •64 individual growers•6 Cooperatives (22 valid PTO’s and 13 members)

Gender: 65% male; 35% femaleAge: Average 46.8 years23.3% older than 605.8% younger than 3070% between 30 and 60Education: 1.9% - diploma/degree16.5% - Grade 1221.4% - Grade 9 – 1129.2% - Grade 1 – 531.1% - No schooling

BAT Mixed Farming Incubation - BAT Mixed Farming Incubation - ParticipantsParticipants

BAT Mixed Farming Incubation BAT Mixed Farming Incubation – – ParticipantsParticipants

Mother Tongue:Siswati – 45.6%Sepedi – 13.6%

Afrikaans – 9.7%Tshivenda – 8.7%isiNdebele – 7.8%Zitsonga – 1.9%

isiZulu – 1%Shona – 1%

Understanding of EnglishGood = 23.3%; Fair = 38.8%; Not at all = 37.9%

Remain calm, even when it seems hopeless

Impact and PerformanceImpact and Performance

VIRTUAL Seda Funding Stream INCUBATION VIRTUAL Seda Funding Stream INCUBATION performance (March 2014 – April 2015)performance (March 2014 – April 2015)

Key Performance Indicator Annual Target Actual

New SMME's created 20 24

SMME's supported 95 162

Clients supported 160 147 (+66 Graduates)

Jobs created 50 100

Collective turnover of Clients R3.2m R10,6m

% youth owned in portfolio 30% 16%

% women owned in portfolio 30% 48%

% black owned in portfolio 80% 100%

Mixed INCUBATIONMixed INCUBATIONIncome SCV Tobacco Income SCV Tobacco

Loan of R7,2m – half for labourLoan of R7,2m – half for labourR3,6 cash in communitiesR3,6 cash in communities

Households:Households: ±169 workers ±169 workers 8.17 /household thus 169x8.17 = 8.17 /household thus 169x8.17 =

1380 beneficiaries1380 beneficiaries±800 part-time jobs±800 part-time jobs

Social Economic DevelopmentSocial Economic DevelopmentMaize, beans, vegetables, geranium productionMaize, beans, vegetables, geranium production

•Food security Food security •Economic developmentEconomic development

Incubation – Incubation – Reasons for successReasons for success

• Close involvement for long timeClose involvement for long time

• Trust relationshipTrust relationship

• Management of expectationsManagement of expectations

• Approach to detailed planningApproach to detailed planning

• Comprehensive project initiated by entity with clear Comprehensive project initiated by entity with clear

understanding and focused objective – win-win situationunderstanding and focused objective – win-win situation

• Dedicated staff!Dedicated staff!

Additional ServicesAdditional Services

VIRTUAL INCUBATION VIRTUAL INCUBATION CHALLENGESCHALLENGES

• Land rights issues

• Water rights issues

• Legal entities and Governance

• Lack of Buildings, Infrastructure and Transport

• Understanding, interpretation, control and management of

production budgets and schedules

• Ownership of future production (preference to privately

owned due to lack of leadership; in-fighting; slow decision-

making processes)

• Bridging strategies from emergent to commercial farming

ConclusionConclusion

• No one alone

• No short-cuts

• No quick-fix

• Need partnerships

• Endurance – not negotiable

THANK YOUTHANK YOU

www.masdt.co.zaTel: +27 13 753 2470

info@masdt.co.za

HOPE