South Africa supports berry farming for job creation
Thu, 07 Mar 2013 08:00
The government is targeting berry farming as an economic driver in the Eastern Cape and other provinces.
In December 2012 Frontier looked at how the Eastern Cape Province has targeted bamboo as an industry that can potentially create thousands of jobs in the province, which has the highest unemployment rate in the country.
Berries are another industry that the province is backing. The Eastern Cape Development Corporation (ECDC) is funding the development of berry farming in the province and regards the fruit as an economic driver. It is spearheading an initiative in the Eastern Cape known as the ‘Berry Corridor.’
The overall vision of the berry corridor is to become the biggest blueberry producer in the southern hemisphere. The target is to establish over 500ha of blueberries in Amathole (one of the seven districts of Eastern Cape Province) by 2020, and develop associated berry processing facilities at Amabele.
The anchor development in the berry corridor is Thornhill Farm owned by Amathole Berries (Pty) Ltd. It was founded in 2008 and is situated near the town of Stutterheim. The project is supported by Aspire – the Amathole Economic Development Agency, the ECDC, the Industrial Development Corporation (IDC) and the Eastern Cape provincial government.
The IDC approved the R45-million project in 2007. IDC spokesperson Rian Coetzee said that the IDC approved funding of R18-million, and the European Union-backed risk-capital facility contributed a further R18-million for the establishment of the blueberry farm and packaging facility on 410 ha of land.
The blueberry project is expected to create about 2300 jobs in an area with a 55% unemployment rate. Full operational development will take place around 2015, with the 410ha blueberry farm reaching maturity in 2020, says Rian.
According to Rian, the IDC had done extensive research and determined that blueberry was ideal as a high-value crop with a high-demand trend, especially in the northern hemisphere.
He added that the labour intensive crop was in line with AsgiSA (economic policy launched to address unemployment and the skills shortage) plans of labour absorption and was highly desirable to northern hemisphere consumers, who were health conscious.
Farmer’s Weekly magazine ran a story about Amathole Berries in 2013 and interviewed CEO Ryan Davies. According to him, the company expects to yield 3 000t of blueberries per season by 2020. At the moment, 39 hectares of blueberry orchards are under cultivation.
The company plans to harvest 64t of berries this season. The organic blueberries are for sale locally and internationally. It has a 10t off-take agreement with Woolworths.
“It is an example of public-private partnership working towards a long-term development goal,” says Stuart Bartlett, head of the IDC’s Agency Development and Support department.
Access roads are receiving attention and plans are being drawn up to build a fruit and pulp processing plant at a nearby village, says the IDC in a press release. It also has a positive developmental impact by creating jobs in a poor area.
“Unlike grapes that are harvested in bunches, blueberries are picked individually and most of the pickers are women,” says Amathole Berries’ Duncan Currie.
“The Eastern Cape has huge potential for growing berries, including raspberries and other soft berries associated with northern European climatic zones,” he says.
Other spin-offs included the use of bees for pollination, and worm farming for organic fertilisers. Says Ryan: “More than 60% of the cultivars need bees for pollination. We have 100 hives at the moment, but we will need 3000 hives when the farm is at its full potential, so there is a huge gap for spin-off in that industry.”
IDC role and its berry projects in other provinces
About ten years ago the IDC identified berries as an emerging industry which would meet its investment criteria – it’s potential for creating jobs and value as an export commodity.
The IDC's agro-industries business unit set out to give money to potentially profitable ventures and conducted research and analysis of growing conditions, market access and demand. It also recently helped to establish an industry body, the South African Berry Producers Association (SABPA).
“There is a growing trend in traditional export markets such as Europe for healthier eating with a focus on antioxidants, which berries provide,” says business unit head Rian Coetzee.
"People want to eat healthier and their food basket is increasingly switching to healthier food," he says. "We can grow the berries counter-seasonal, the crops are labour-intensive and we have done an analysis that supports starting a berry industry in South Africa."
An IDC press release from 2012 said that a significant investment has been made in projects to establish or expand the production of strawberries in North West and the Eastern Cape, raspberries in KwaZulu-Natal and blueberries in the Western and Eastern Cape.
Aside from the Amathole Berries farm in the Eastern Cape, the IDC has also invested in another berry project in George in the Western Cape Province. Blue Mountain Berries is one of the IDC's flagship berry projects and employs 340 people.
The company has the honour of being the first southern hemisphere supplier to the United Kingdom market and today exports about 90% of its produce, CEO Chrisleo Botha said in an interview in 2011. The remainder is supplied to local retail chains such as Woolworths, Pick n Pay and Shoprite.
“Berry farming is labour intensive. The berries are picked by hand and during harvest time our permanent workforce of 85 can swell to 800 seasonal labourers at full production,” Chrisleo says.
When Blue Mountain Berries was established, part of the deal included a stake for staff through a worker empowerment trust, thereby satisfying the IDC's need to promote BEE in rural areas.
Lushof is another cultivation company that grows organic berries in the Western Cape's Tulbach district. They have a similar BEE structure. When the IDC provided R64-million for the expansion of the farm, it established the Lushof workers' trust which gained a share in the farm.
In Charlestown, KwaZulu-Natal, the IDC’s agro-industries unit and the National Empowerment Fund jointly invested R34-million in a community-owned raspberry farm called Amajuba Berries, mainly for orchard finance, a packhouse, and farming equipment.
The farm came into being in 2007 after the Charlestown community received 8 500 hectares through the land restitution programme. The project will create jobs for 91 permanent workers and 704 annualised seasonal workers.
According to an article in Food & Beverage Reporter in 2007, a Free State raspberry farmer, Frans Fourie, has invested a further R3.8-million in expertise, equipment and plant material and his Prosperity Trust holds 10% of the project.
It is anticipated that 70% of production will be exported, 5% will go into the SA market, and the balance of 25% will go into processing raspberries for beverages, yoghurts, cereals, snacks and desserts.
"We have created a space for South Africa to supply a wide window of berries to the European space so that we can become a brand, because we can supply them from the early to late season," says Rian. "Other berry projects are also being established outside of our investments, so we are gaining critical mass."
Overview of South Africa berry industry
In June 2012, Farmer’s Weekly interviewed Trevor McKenzie, the chairperson of the South African Berry Producers Association (SABPA) to chat to him about the berry industry.
According to Trevor, the berry industry in South Africa is quite small compared to other fruit industries. Only 2000t of berries are exported each year, compared to 200 000t for table grapes.
However he draws our attention to the massive opportunities that are available for berry producers: sales in the U.K., South Africa’s main export market for berries, are expected to reach the £1 billion (R12.9-billion) mark this year.
Global demand for berries is booming and there has been a corresponding surge in growth at home to feed this market – blueberry and raspberry production has grown roughly tenfold in the last five years.
“The berry industry experienced rapid growth in production during the past few years and berry exports grew to be worth a few hundred million rands. But the industry was quite fragmented so it was time to become more organised so that we could have a collective voice,” says Trevor.
In 2008, only about 200t were exported, but there has been rapid growth over the past five years so that now the industry exports more than 1 000t of both blueberries and raspberries, and 50t of blackberries per annum.
“It has only been during the last three years or so that we have seen exceptional growth in berry production and the industry continues to grow at about 30% per year,” Trevor says.
Trevor, an experienced berry farmer, and the managing director of one of South Africa’s major berry companies, Eurafruit, based in Stellenbosch, established the South African Berry Producers Association to co-ordinate the various activities of the industry. The association has 16 members that represent over 90% of the industry.
In total, 80% of South African berries are exported, the most important markets being the UK and Europe. South African berries are in demand in the northern hemisphere because of counter-cyclical seasonality, especially during their winter when their local supply is limited.
“We are a small producer in international terms. Our main competitors in blueberries are South American countries such as Chile which produces about 70 000t of blueberries per year and Argentina which produces about 14 000t. But we are able to compete with these European countries because of our geographical proximity to the market,” says Trevor.
“We also compete well in terms of quality. We don’t necessarily produce a better product, but we do produce a more consistent product because we have a smaller number of producers, thus making it easier for us to ensure that quality controls are in place throughout the industry.”