The awarding of a water licence to an Eastern Cape citrus company is set to unlock the transformation of 700 hectares of bush in the Sundays River Valley into a thriving collective farm, kick-starting a R300-million black economic empowerment project.
The Ikamva Lethu project has been widely praised as a template for future agricultural empowerment deals around the country, thanks to its structure which includes long-term buy-in by both land owners and previously disadvantaged members of the community working on farms in the region.
But its success hinged on allocation of a water licence by the provincial Department of Water and Sanitation. For a time, this appeared to be in question, but the recent green light now allows the farm to draw enough water from the Sundays River Irrigation Scheme to make the project viable.
“[It’s] brought the project to life… as it now allows us to commence with serious and meaningful planning of the implementation phases of the project,” said the Sundays River Citrus Company (SRCC), which is the driving force behind the project.
The water licence is for 675 hectares equivalent of water for a period of 20 years, subject to a number of conditions and will be renewable subject to certain conditions. One of the most important of these is that the empowerment shareholding in Ikamva Lethu Farms (Pty) Ltd, the operating company in whose name the licence has been registered, may not fall below 59% at any time.
The SRCC which represents about 10% of South Africa’s citrus industry and around 45% of the citrus coming from the Sundays River Valley, has earmarked some 700 hectares in the area for the project, part of a 1200-hectare tract of farmland it has purchased and registered.
Environmental Impact Assessment
An environmental impact assessment (EIA) application for the development of the farmland – which at present is just bush – has now been submitted to the Department of Environmental Affairs, with authorisation for the project expected towards the end of 2017. The EIA will determine the exact amount of land which will be cultivated.
Ken Nieuwenhuizen, SRCC director of transformation and development, said the valley was one of the major players in the SA citrus industry. “There are about 150 citrus farms here covering around
12 000 hectares in total. So already we are looking at possibly the largest empowerment deal in the citrus industry in the country – and one of the biggest farming enterprises in the valley, when it is fully realised.”
The knock-on effects of the project for the growth of downstream industries – from transport and logistics to storage and packaging – were significant, he said.
“We are starting from absolutely nothing. We have bushland and water at this stage. Once we have the authorisation [from the EIA application], then we can start building infrastructure before we plant the trees.”
The first phase of four will include laying infrastructure and building dams, which will take about 18 months. This includes cultivating the first 150 hectares of orchards – planting about 75 000 trees.
Scale of Project
Outlining the scale of the project, SRCC operations manager Frikkie Olivier said, “The average size of a farm in the valley is 60 hectares, so effectively we’ll be planting the equivalent of two farms a year.” He said the earmarked starting date for planting of trees was spring 2019, with completion scheduled for 2023.
The first fruits of the project are expected to be borne in 2022. As the project unfolds, citrus varieties to be planted would be determined by market demand, and could also include juice processing opportunities.
The project promises to be a major jobs boost for the Eastern Cape agricultural sector, with up to 80 permanent employees and as many as 700 seasonal workers when fully operational. This was excluding the downstream job creation opportunities, said Nieuwenhuizen.
Furthermore, there were on average five dependants for every employed person in the valley who would benefit from the project, he said.
“Ikamva Lethu is very broad-based; it’s about inclusivity and participation and will result in about 400 community members becoming shareholders and beneficiaries benefiting from the success of the project.”