Dawn Meats Group

South Africa - Farmers offered land in Libya in return for expertise

23 Dec 2009

Faced with little room to expand because of government’s land-reform policies, South Africa’s commercial farmers are seeking greener pastures. On a recent visit to oil-rich Libya, they found a country bursting with untapped potential, in desperate need of agricultural skills, and prepared to throw the farmers all the subsidies and support they need to make the desert bloom. Stephan Hofstätter accompanied them on the fact-finding mission.
Agri sa’s gauteng president
André Botha tries hard to hide his enthusiasm. He is inspecting a derelict state dairy near Al Khums on the north coast of Libya built in 1997 to help alleviate the oil-rich country’s massive dependence on imported food.Although able to handle 3 500 cows, it rarely housed half that number, with production steadily declining until it closed in 2007, mostly because a steady supply of fodder couldn’t be maintained. “Back home this would cost R100 million to build,” he says. “We could turn it into a model farm for under R10 million and in two weeks I could draw the first milk.”
André was part of a three-man delegation, headed by Agri SA deputy president Theo de Jager, who went on a fact-finding mission to Libya recently, after the union was invited to help the country revive its agricultural production. Libya has over 20 massive state farms that have collapsed or are in terminal decline, while the country imports 75% of its food needs. The scale of this state dairy farm is staggering. It once employed 140 people, many of whom had well-appointed modern homes on the farm, which has cement access roads and driveways. It has three fully equipped milking parlours, with some equipment still lying in the packaging it was bought in. Three boreholes and a connection to Libya’s Great Man-Made River ensure it’ll never run out of water, and the complex is equipped with its own power source (see box: The Great Man-Made River).
Providing the cows with a regular supply of high-quality fodder is the main challenge in reviving the dairy, explains André. The 75ha of irrigable land attached to the dairy won’t provide enough feed for 3 500 cows, which means the shortfall will have to be trucked in. On-site processing possibilities would have to be investigated to increase profit margins, and more clarity about marketing and distribution chains and foreign competition is needed. Initial indications are that producer prices are much higher than in South Africa.The Al Khums dairy is one of five giant derelict complexes in the country. There is also about 500 000ha of unused, good-quality grazing land with irrigation infrastructure in different parts of the country that aren’t being farmed.
The delegation’s trip was part of a drive by South African farmers, supported by our government, to expand into other African countries because of a shortage of land and water back home. This has been caused, in part, by the government’s land-reform policies, which seek to transfer 30% of white-owned farms to blacks within five years. “The South African farmer has reached breaking point,” Theo explains. “We’re looking for opportunities elsewhere.”
Khadra olive plantation
On the first day of their visit, the farmers were taken to a 40 000ha olive plantation at Khadra, east of Tripoli, where 5,7 million trees of 15 different cultivars were planted by the Italians in the 1930s.
A few subsistence patches dotting the hills are the only sign of agricultural activity now. Despite being connected to the man-made river, yields from the well-established trees plummeted after the estate was turned into a state farm. On a small test patch on Khadra estate, local farmers have shown yields can be boosted with better irrigation. The South African farmers estimated that with drip irrigation and proper application of fertiliser, this could easily be doubled. Because trees were planted at 20m x 20m intervals, there’s plenty of room for other crops to be grown commercially between the rows.
KZN sugarcane and game farmer Charl Senekal, who also accompanied the mission, believes the estate could generate revenue almost immediately with minimal intervention. “We wouldn’t be charged for electricity. At the current electricity price, it would cost R3 million to R4 million a month to irrigate this estate in South Africa. The olives on the neglected trees alone are worth R30 million, which means the project would become an immediate earner. The easiest thing to sell is a higher nett profit. There will be major South African interest in this,” he says.
Hira poultry project
The group also visited a massive poultry project at Hira about 100km south of Tripoli that was built in the early 1980s. The complex has eight feeding stations, a fully equipped feed mill, an abattoir, several wells and a connection to the man-made river, with 15 000ha of unused irrigable land that could grow feed. But output is currently at 40% of capacity, partly through administrative inefficiencies and insufficient feed.
Conditions of doing business
Large, semi-arid areas along the man-made river have been turned into giant olive plantations that are farmed sub-optimally. In one case, a new, drip-irrigated greenhouse, capable of raising 1 million saplings, has stood empty for months. But there are several conditions to be met under Libyan law. Farmers will need to find local partners with a minimum stake of 35%, and be prepared to share their skills and knowledge. “Libya doesn’t need money – it needs expertise,” explains Maher Mellouli, a director of El Wadi, the agricultural company that holds an option on the licence to develop several state farms, including the Khadra olive estate and the Al Khums dairy. “That’s why joint ventures must include provisions for technology transfer.”
El Wadi has proposed a R3 million licence fee and a 10% share in profits. In return, farmers will get free land and improvements, water and electricity, as well as access to interest-free funding for two-thirds of the project costs. Other incentives include a 50% subsidy on agricultural equipment, 30% for inputs, and exemption from income and import tax. “There are so many advantages, it would be stupid not to go for it,” says Charl. “This is going to be the new Dubai.”
Cautious approach
Theo is more guarded. “There are wonderful opportunities especially in olives, grapes, citrus, sheep, poultry and dairy, and there’s no doubt our farmers would turn this place around,” he says. “But I’m worried about Libya’s track record of enforcing contracts with other South African businesses. We need further discussions with our government on administrative security.” He also cautions that the impact of a massive boost in commercial production would have to be carefully managed. Farmers would also be forced to look after their own religious, educational and entertainment needs. “It’s not going to be an easy, relaxed environment for South African farmers, but when it comes to profit I haven’t seen this kind of opportunity before. There’s a lot of money to be made if you’ve got the guts.”
Theo attended a meeting in Tripoli with agriculture minister Mohammed Mansouri and says there’s no doubt the Libyan government is very supportive of South African farmers helping the country.
“They emphasised that we are all Africans and should work together for the good of the continent,” he says. The government is particularly keen on developing its dairy, livestock and poultry industries. It also wants help with organic certification, and its packaging and distribution chains for major export products such as olives and dates, to gain access to European markets.
Don’t repeat colonial mistakes
Libyan farming groups are upbeat about collaborating with South African farmers. “South Africa is the southern gate to Africa and Libya is the northern gate to Europe,” says one agricultural leader.
“If we cooperate, we could achieve a massive increase in production and be in a position to export to European markets.” But André cautions South African farmers not to replicate paternalistic relationships that African countries experienced under colonialism. “We must make sure we don’t impose our will on these people,” he says. “The farmers who come here will be ambassadors for South Africa. The guys who are living in the past must stay there.”
Agri SA’s expansion into Africa rests on three legs, he adds. Firstly, it explores new opportunities to diversify and expand. Secondly, it seeks to empower locals in modern farming techniques. Ideally, local farmers should be allocated more land, and market their products through the same distribution chains as the South African farmers. Thirdly, it forms part of the South African government’s programme of reaching out to Africa without being paternalistic. “I always ask what value we can add to these countries?” says André. “We want to show the world that farmers can bring stability to Africa and that we can be agents of positive change.”     |fw
The Great Man-Made River
Over 90% of Libya’s surface area is classified as desert. During exploratory drilling for oil in the Sahara Desert in the 1950s and 1960s, large underground reservoirs of water were discovered.
To solve chronic water shortages in the densely populated Mediterranean coastal strip, Libyan leader Muammar Qaddafi embarked on what is regarded the world’s most ambitious water-supply and irrigation project.
The Great Man-Made River was completed in 2003 at an estimated cost of R360 billion. It carries 6,5 million cubic metres of fresh water every day to the northern strip from the giant Saharan aquifers 1 500km away, through a 5 000km pipeline network measuring 4,5m in diameter buried in 7m-deep trenches. The entire system is gravity-fed, and achieves water pressures of 3-bars at the end of the pipeline. The SA farmers visiting the desert region which has been transformed into green plantations of table grapes and olives were impressed. “Qaddafi should get a Nobel prize for this,” said Agri SA’s Gauteng president, André Botha.It’s unclear how long the water will last, with estimates from 50 to 200 years. Mindful that the Saharan aquifers represent a non-renewable resource, the Libyan government has apparently set aside US0 billion (nearly R2 trillion) for another massive engineering feat that envisages pumping water from a tributary of
the Congo River.
Bungled land reform forces SA farmers to seek other pastures
Charl Senekal belongs to the so-called “club of super farmers”. His 4 500ha sugar plantation and 14 500ha game farm and lodge’s turnover is R160 million a year, soon to grow to R200 million. He also owns a 25% stake in a sugar mill that handles 1,2 million tons of sugarcane and turns over R800 million a year. Senekal considers himself a progressive farmer. He says he supports land reform, black empowerment and efforts to uplift the poor. That’s why he sold a third of his cane holdings in KwaZulu-Natal, some of his best land, to workers with more than five years’ service, at a third of the market value.
It also explains his decision to provide 150 cotton farmers a soft loan in the early 1990s to develop neighbouring land. Also, after approaching the then deputy president Jacob Zuma to get officials to allocate enough water from the Pongola dam to irrigate 4 500ha of cane, he spent R43 million on a pipeline that also supplies 250 000 local villagers with fresh water on tap for the first time. “I love to develop people,” he says. “I want to see this country thrive.”
But like many fellow progressives, he’s beginning to wonder if his efforts were misplaced, and is now actively looking for greener pastures elsewhere, including Libya. Every inch of his land, including a 14 500 game farm and lodge, is subject to a land claim he says he has investigated and found to be without merit. But the Land Claims Commission has refused to budge, or prove its case in court. “I’m all for land reform, but we must think of food security and employment. What if I leave and 1 200 people are out of jobs?” Despite rejecting the claim’s validity, Senekal has offered the commission 600ha of cane land, which he would lease back for 20 years. “I’ll put up a training facility and train them from scratch,” he says, pointing out that his workers are flourishing on their cane land under the same model. The commission is considering this, which would cost R60 million to R70 million. But given its current cash crisis, the
issue is unlikely to be resolved soon. “The land claims are the reason I’m in Libya,” he says.
But he is pinning his hopes on Zuma to save agriculture from its decade-long slide due to government neglect.
His initial approach of Zuma sparked a personal relationship. Zuma has visited his farm several times, although they’ve only been in contact telephonically since he took office. “Currently, with the Zuma administration, it’s the most optimistic period for farmers,” says Senekal. “But we still get zero assistance from government. Since we arrived in Libya, I’ve already spoken to quite a few farmers who would be interested in exploring these opportunities because of the limitations we face,” he says. “Big farmers like us are worried about how it’s going in South Africa.”

Source: farmersweekly.co.za

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