Maize in the spotlight

Friday, July 24th, 2015

SAB Go-Farming Maize InitiativeThe Go-Farming initiative extends to maize

You may have read about our Go-Farming initiative, in which we work with local farmers to create self-sustaining businesses, while also securing the raw materials we need to make beer.

 It was started in the early 1990s with barley farmers in Taung, in the Northern Cape. This agricultural development initiative proved such a success that soon maize was incorporated too. The Go-Farming maize initiative is now established in both KZN and the Northern Cape.

Go-Farming for maize was launched 12 years ago and today 104 farmers from Taung grow maize for SAB. The KZN project began in 2011 in partnership with the Department of Agriculture, and three years later the Department of Trade and Industry (DTI) came on board for a three-year programme. It’s hoped that once this programme has concluded, the participating farmers will be sufficiently skilled to keep producing independently.

Last year SAB invested R4-million in the KZN project and the DTI contributed R700 000. The DTI partnership with SAB aids infrastructure development through a system of grants, which SAB manages on behalf of the farmers.

The KZN project supports 98 farmers in the Bergville, Newcastle and Estcourt areas, covering the uThukela and Amajuba districts. Together with Taung, these previously disadvantaged small-scale farmers currently supply about 12 000 of the 180 000 tonnes of maize required by SAB annually.

Growing rural economies

Barley, maize and hops are key to SAB’s supply chain and, thanks to Go-Farming, are now also driving local rural economic growth.

Agriculture is of critical importance to SAB and to South Africa as a whole. An independent study by economic group Econex found that SAB’s operations, or the spin-offs thereof, are responsible for more than 110 000 – or 2, 5% – of all jobs created in rural areas. As such, SAB continues striving to be a positive economic force within the small-scale farming industry.

Partnerships and support

SAB plays a vital role in these initiatives, developing them, acting as intermediaries between government and farmers, providing finance, and being the final market for farmers operating under the Go-Farming banner.

Our financial support comes in the form of rolling credit, which at this stage, stands at about R46-million. This provides funding for input costs like seeds, fertilisers and insecticides. We also work with partner agencies to assist in managing the day to day running of the initiative. They deal with the upskilling of farmers, appointing mentors, working with independent contractors to ensure farmers are supplied their raw materials, and handle all the negotiations around these materials.

The virtuous cycle

Ultimately, the Go-Farming initiatives support SAB’s business model, which is founded on the premise of a virtuous cycle, in which SAB invests in strategic areas to drive growth and leverage its scale to deliver efficiencies. This, in turn, supports further investment for growth.

Success rates and yields vary, depending on areas. In Taung, where the farmers have been working with SAB for more than 24 years, and have well-established irrigation systems and dams, farmers are producing about 10 tonnes per hectare. But in KZN, farmers fell short of the five-tonne-per hectare mark in 2014.

The results are still tangible: the impact of these projects can be seen in the farmers who started off with very little and who now own cars, have upgraded homes and can afford to send their children to school and university.

 

2014  results

2017 ambition

  • 1 749 hectares (ha) under maize
  • 6 000 ha under maize
  • Producing 9 048 tonnes of maize
  • Producing 35 000 tonnes of maize
  • Farmed by 159 farmers
  • Farmed by 180 farmers
  • Input costs totaling R13-million
  • R48-million investment
  • Currently supply about 7% of SAB’s annual maize requirements
  • Supply nearly 20% of SAB’s annual maize requirements

 

There are great plans for the project to grow enough to produce nearly 20% of our maize requirements.

Find out more about our agricultural initiatives on SAB Stories.

 

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