How CCBSA helped to establish one of South Africa’s most successful agricultural empowerment projects

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The road to Augrabies, in the Northern Cape, winds through an endless, dry landscape of scraggly bush and ironstone hills. As the Orange River sighs into view, the countryside changes dramatically. A brilliant gash of green hugs the riverbank as far as the eye can see. It is here – in the heart of South Africa’s grape country – that one of the country’s most successful empowerment farms has driven a stake into the ground.

What started as a dream between a farmer and farm workers almost a decade ago, is now a sophisticated, thriving, state-of-the art farming operation, thanks in large part to the enthusiastic support of Coca-Cola Beverages SA (CCBSA) Mintirho’s  Foundation that supports historically disadvantaged farmers and small suppliers of inputs in their supply chain.

It began in 2010, when farmer Fritz Oosthuizen ceded more than a quarter of his grape farm to a workers’ trust. The beneficiaries were a group of 49 long-standing employees – some with family ties reaching back to the time when Fritz’s father ran the farm. “It has always been my dream to develop a viable farming operation that is owned, operated and managed by workers. I felt very strongly about fostering a sense belonging for the people who have been living and working on this farm for a long time. It is important that they are more than just a number on the payroll, and one way is for them to own a part of the land” he says.

For a while the idea seemed like a flight of fancy. “It was just land with rocks and animals; we wondered how we would turn it into a grape farm,” says Hendrik Moepetsane, an Assistant Manager on the main farm and also Chairperson of the Augrabies Falls Workers Empowerment Trust.

Vineyard soil preparation is notoriously costly -- from the blasting required to loosen and remove rocks, earth moving equipment to clear the land, digging of trenches for irrigation pipes and the planting of poles for staking -- a vast capital outlay is required before planting can even begin. When the government granted water rights for the 100 hectares in 2011, their dream became viable for the first time. But, there was added pressure. A pre-condition of the water rights was that they had to start using the license within 5 years, and the search for funding to develop the farm became all the more urgent. “We had water and land, but we didn’t have money to make this project a success,” says beneficiary, James Moolibedi.

Fritz, a long time supplier of grapes to Orange River Cellars (ORC), approached the cooperative for development money, and they facilitated a loan. ORC primarily produces wine, but they also produce grape juice concentrate for the soft beverage industry. At the time, the demand for grapes was starting to outstrip the supply ORC was receiving, and it made business sense for them to support an initiative that would ultimately help in bringing more product on stream for them.

With the loan from ORC, Augrabies Falls Empowerment Farms was able to get out of the starting blocks. In 2015 and 2016 they put the first 70 hectares under vines. The soil preparation turned out to be far more costly than they had envisaged and, with about 30 hectares still to go, their money ran out.

“We didn’t know who to turn to,” says Hendrik. “We went all over South Africa looking for financial assistance but nothing was forthcoming.” Then, CCBSA came on board. They became aware of the empowerment project through Orange River Cellars, supplying the concentrate used in Appletiser products. “Coca Cola came to assess our farm, and then decided to assist us. I cannot explain how grateful we were,” says Hendrik. “It was as if our prayers had been answered. When I look back over what we have achieved this past year since they began supporting us, I can say with complete confidence that we would not have managed without their help. We would have been stuck, with no way of taking our dream forward.”

There is a back story to how a major beverage company like CCBSA “went farming”. In 2014, the Coca-Cola Company, SABMiller plc (now AB InBev) and Gutsche Family Investments announced their intention to merge the bottling operations of their non-alcoholic ready-to-drink beverages businesses in Southern and East Africa and trade as Coca-Cola Beverages South Africa.  Among the merger conditions set out by the Competition Commission was for CCBSA to establish a fund to assist and develop historically disadvantaged farmers and small suppliers in their agricultural value chain. CCBSA established the Mintirho Foundation to drive this initiative.

Mintirho provided a R12.2 million grant to Augrabies Falls Empowerment Farms in 2016 to put their remaining 30 hectares into production. The grant also enabled them to increase the capacity of their irrigation storage to allow for additional water to be piped to the new vineyards that were going into the ground.

By 2017, the fixed infrastructure was in place, but the work had only just begun. Nurturing the vines requires an ongoing cycle of maintenance – irrigation, fertilising, spraying for pests. The Trust did not own any machinery. “We were completely dependent on our neighbours,” says Johannes Morapedi, one of the farm managers. ”We would borrow or lease where we could. Sometimes we would struggle for two days just to get tractors to spray our vines. Sometimes we worked at night, because the machinery was being used by other farmers during the day.” 

Apart from the problems of accessing equipment, there was also the mounting concern around expenses. “It was just debt upon debt upon debt,” says beneficiary Brigitte Swartz. “We were already dealing with the interest repayments on the big loan from Orange River Cellars, and now we were spending more and more money every time we needed a tractor or a sprayer.”

The initial plan had been for groups of beneficiaries to register co-ops and then buy the necessary machinery using start-up capital that, in principle, is available from government for micro enterprises. Theoretically it was a good scheme, as it would have allowed beneficiaries to make some money from leasing the machinery to the Trust. However, the reality was that the inordinate amount of red tape in the way of accessing these grants, put paid to that idea, and once again CCBSA stepped in. “All the equipment on the farm – the tractors, the bakkie, the motorbikes, the road grader, you name it – was given to us by CCBSA. We are so proud. Without this we would not have been able to move forward. We would have had to incur more debt just to keep going. Coca Cola opened a door for us that we would not have been able to open for ourselves,” says Brigitte. Honey Ebusang, another beneficiary, agrees. “We worked for such a long time without achieving much.  Where we are now is because of Coca Cola”.

Through the assistance of the CCBSA Mintirho Foundation, Augrabies Falls Empowerment Farms is a fully established commercial enterprise with enormous potential. The first harvest in 2016 yielded 483 tons of grapes. By 2018, this had risen to 1150 tons. Once the vineyards are fully established, they expect to be able to deliver up to 4000 tons of grapes to Orange River Cellars annually.

Supervisor Johannes Morapedi is one of eight permanent workers on the farm. He says one of the core principles is to multi-skill the people who work here. “We teach our people how to maintain a grapevine and how to produce quality grapes, but we want them to not only know about grapes. They need to know how to drive a tractor, how to irrigate, how to do fencing, how to check the netting. When one of us is absent, we want the work to proceed.”

Farming is a delicate balance between progress and patience. While the farm is now on a firm footing, and yields are beyond expectations, it will take a long time before there are any tangible monetary benefits for the beneficiaries themselves. 

“Paying off the original loan will take a long time,” says Brigitte Swartz. “Sometimes it’s difficult for us accept that it will only be the next generation who will reap any real financial benefits from what we are doing. I am retiring in three years, and of course you hope to have a nest egg when that time comes, but that won’t be the case for those of us who are nearing retirement age. It will take a long time before we start making any money, because, for now, the income goes towards paying off our big loan and developing the farm.” 

Hendrik agrees that it’s sometimes hard to stay focused on the future goal, but he says none of them are members of the Trust “merely for money”. 
“I love farming because you can see the progress with your own eyes, but farming, especially in a Trust, takes time. We need to harvest and sell our fruits to the market, and then we must pay our debts. It’s not something that can happen in a year or two.” 

James Modibedi says it is important to appreciate how far they have come. “We are working to make a better future for our children. In the beginning, this was just a piece of dry ground. Today there are fields, pump rooms, tractors, pivots... we have farm vehicles and motorbikes. All this Coca Cola has helped us to acquire. It makes me happy to be able to see this progress with my own eyes.

Every beneficiary echoes this sentiment – that for them this is an investment in their children’s future, but they also see their farm as making a difference to the communities around them and the country as a whole.

Hendrik says they hope to grow to the point where they are able to tap into the export market. We want to be big enough to contribute to the development of South Africa’s economy. We want to create a brighter future for our children, but we also want to build our country and create job opportunities”

While the Trust beneficiaries are all employed on Fritz’s main farms, the empowerment farm has eight permanent employees and also provides work to 30 casual workers.

One of the workers, Johannes Morapedi, adds one last wish. “We also need a storeroom for all this beautiful equipment we have been given by CCBSA. Twenty years from now, these tractors must still be able to work and I worry about them standing in the wind and weather. To be successful in farming, one must look after what you have, because the opportunity we have been given by CCBSA will not come knocking again.”

Augrabies Empowerment Farms is a rare success story in a world in which agricultural empowerment projects are often hamstrung by a lack of funding, technical know-how and a long-term vision. This farm has all of that in spades. They have the financial support of the Mintirho Foundation. The worker shareholders are all steeped in the tradition of farming and they understand the potential, but also the pitfalls. They have the backing and support of a highly successful farming operation and a ready market for their produce in Orange River Cellars.