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1GAUTENG AGRIPARKS

2 GAUTENG AGRIPARKS

Copyright © 2016Gauteng Provincial Government

Tel: +27 11 240 2500 Fax: 086 420 1000PO Box 8769, Johannesburg, 2000

[email protected]

0861 GAUTENG / 0861 4288364

Agri-Parks is a product of the Gauteng Department of Agriculture and Rural Development.No part of this document, or emblem may be copied, transmitted or used for any purpose without the permission of the Gauteng Provincial Government.

Phase 1: HORTICULTURE

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VISION

“An economically transformed agricultural sector, and sustainable environmental management for healthy, food secure, developed rural and urban communities in Gauteng.”

MISSION

“To radically modernize and transform agriculture, environment and rural development by: • promoting environmental protection and management;• expanding access to agricultural opportunities;• maximising food security; • up-scaling rural development; • promoting the One Health System; and • supporting sustainable livelihoods and communities.”

VALUES

The Departments value driven approach focuses on developing synergy and working towards a common goal.

Our values include: • Integrity• Commitment • Accountability• Respect• Empowerment• Team Orientation• Trend setting • Responsiveness

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WHY THE AGRIPARKS?

Gauteng Agri-parks Program emphasize the concept of a one stop destination for enhancing participation of all farmers in particular smallholder farmers in the agri-food value chain. Agri-parks are a continuation of the agriculture hubs concept that insists on the need for agriculture development zones on the basis of achieving volumes, increased levels of competitiveness and sustainability whilst ensuring judicious use of limited natural resources and playing a more meaningful role in growing Gauteng’s economy.

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CONTENTS

SECTION A: CONCEPT DOCUMENT PAGE

1. INTRODUCTION 6

2. OBJECTIVES OF THE GAUTENG AGRIPARKS 7

3. STRATEGIC ALIGNMENT OF THE AGRIPARKS

3.1 Alignment to Gauteng‘s Pillars of Transformation, Modernisation and Reindustrialisation (TMR)

3.2 Alignment to the National Development Plan (NDP), New Growth Path(NGP) and the Agriculture Policy Action Plan

(APAP)

3.3 Alignment to the Ten principles of National Agriparks program driven by the Department of Rural Development and

Land Reform (DRDLR)

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4. OWNERSHIP AND MANAGEMENT MODEL OF THE AGRIPARKS

4.1 Ownership of the Agriparks Infrastructure

4.2 Operation model of the Agriparks

4.3 Prioritized horticultural commodities and expected revenue

4.4. Financial Sustainability

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5. DESCRIPTION OF THE INDIVIDUAL AGRIPARKS

5.1 Westonaria Agripark

5.2 Sebokeng Agripark

5.3 Eikenhof Agripark

5.4 Merafong Agripark

5.5 The Innovation Hub Agripark

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6. CONCLUSION 22

7. CONTACTS FOR FURTHER INFORMATION 23

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8. MORE INFORMATION: AGRIPARKS LAUNCH 24

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SECTION A: CONCEPT DOCUMENT

1. INTRODUCTION

Agriculture and food production in Gauteng has been undergoing major structural changes. The changes are as a result of diverse factors such as high levels of in-migration and urbanisation which have now resulted with Gauteng, the smallest province in the country being the most populated province with 25% of the population. Unemployment, poverty and hunger continue to contribute to this in-migration in the hope of finding better opportunities. This rapid urbanisation factor has contributed largely to the loss of high potential agricultural land, reduction of bigger farms to smaller farms as land is rezoned from agriculture to housing and industrial development zones. This has warranted that the province should invest in innovative mechanisms and technologies in order to ensure increased productivity on the continuously dwindling farm sizes and land parcels in around the peri-urban areas.

Agri-food supply chain have also become more complex and demanding for all farmers. This is a major structural realignment not only for farmers in Gauteng but nationally and globally. The complexity and changing nature of the agri-food supply chain occurs as a result of challenges with the need to keep food prices low against the ever increasing concerns and demands by consumers, food processors, large retailers and food service companies about food safety, health and nutritional issues. In relation to smallholder farmers, these concerns have been exacerbated by challenges of low volumes and inconsistency of produce.

Gauteng `s investment into technologies such as vertical chambers aims to mitigate such gaps. Gauteng has thus realised that ensuring competitiveness of the smallholder farmers and attracting young modern farmers into the sector requires the creation on an enabling environment and appropriate infrastructure. Sustainability of the smallholder farmers is also to a large extend depended on their successful integration into the mainstream food supply chain. That is the essence and core objective of the agriparks program in Gauteng, to integrate smallholder farmers meaningfully into the food supply chain. Therefore knowledge and innovation are essential for creating and sustaining competitiveness of the smallholder and young farmers.

It is as a result of this rationale that Gauteng Agriparks program is intended to create new opportunities for smallholder farmers as well as address constraints associated with lack of access to markets, lack of access to post-harvest infrastructure such as sorting facilities, packaging and processing facilities. The Agriparks program is therefore a systemic transformative program.

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2. OBJECTIVES OF THE GAUTENG AGRIPARKS

• To provide access to production infrastructure as per identified commodities value chains in the Agriculture Policy Action Plan. The current infrastructure is prioritised for horticultural commodities;

• To provide access to shared cold storage infrastructure that would enable aggregation and bulking up of produce• To enable Agriparks to serve as point of distribution to secured markets; • To serve as a point of linkage and point of access for production inputs; • To provide facilities for farmer training and farmer meetings • To provide access to value adding infrastructure • To provide an avenue for establishment of future marketing outlets which will enhance short food supply chain.

3. STRATEGIC ALIGNMENT OF THE AGRIPARKS

3.1. Alignment to Gauteng‘s Pillars of Transformation, Modernisation and Reindustrialisation (TMR)

• The Gauteng agriparks are at the core of the provincial pillars of Transformation, Modernization and Re-industrialization (TMR). The Agriparks brings forth systemic transformation in the agriculture sector as they enable access and participation by the smallholder farmers in the agri-food value chain.

• The Gauteng agriparks are located in the urban and peri-urban areas and therefore have a strong linkage to the economy of the townships they are located in or nearby. The agriparks are intrinsically linked to the Township Economic Revitalization (TER) program.

• The investment into modern technologies such as the Hydroponics Vertical Chamber established at Westonaria Agripark has prioritised innovative and modern technology and thereby stands a greater potential of attracting youth in the agriculture sector.

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3.2. Alignment to the National Development Plan (NDP), New Growth Path(NGP) and the Agriculture Policy Action Plan (APAP)

• The NDP argues the importance of commercial agriculture for job creation, which has the potential to create 250 000 direct jobs and a further 130 000 indirect jobs. The NDP identifies agricultural subsectors with the potential for long-term, sustainable expansion in production and value adding processes

• The NGP seeks to shift the economy towards strong, sustained, and inclusive economic growth with an emphasis on the rebuilding of the productive sectors of the economy. Infrastructure development and agriculture, in particular, have been identified as a foundation for more jobs and addressing rural underdevelopment. The NGP set targets of increasing the smallholder sector by 300 000 households, ensuring 145 000 additional jobs in agro-processing, and upgrading conditions for 660 000 farm workers.

Fig 1: Agricultural Growth and Employment Potential (NDP, 2012)

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In accordance with Figure 1 (page 8), Gauteng Agriparks have prioritised Horticulture Value Chain with specific bias towards high value vegetables. It is evident that vegetables have a high labour multiplier ratio coupled with high growth potential.

Figure 2 below indicates that horticulture value chain contributes 21% to the agricultural output in the province second to animals / livestock commodity value chain. Gauteng is to further expand the Agriparks program to the Poultry value chain integrated with grain commodity value chain. Grains are prioritised in the mega-agripark with specific reference to the Sedibeng District Municipality.

Fig 2. Percentage contribution of various commodities to the agriculture gross value

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In address growing concentration within the market which impacts job creation, APAP transversal action program seeks to localise food networks, through infrastructure development, incentivising support for SMMEs and smallholder producers across agriculture, forestry and fisheries value chains, and by supporting first entry into the market.

Agriparks program is integrally linked to the transversal program of APAP which entails:

• Climate Smart Agriculture

• Trade, Agri-business Development and Support

• Biosecurity

• Strategic Infrastructure Program (SIP11)

• Research and Innovation

• Land reform

3.3. Alignment to the Ten principles of National Agriparks program driven by the Department of Rural Development and Land Reform (DRDLR)

The Gauteng Agriparks Program was instituted a few years earlier through a program which led to the demarcation of the seven agriculture hubs. However the province has moved to align to the DRDLR Agriparks program although there are slight deviations to two principles below on the basis of unique challenges for Gauteng.

The ten principles are as follows:

• One Agri-Park per Priority District

• Agri-parks must be farmer controlled.

• Agri-parks must be the catalyst around which rural industrialization will takes place.

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• Agri-parks must be supported by government (10 years) to ensure economic sustainability.

• Strengthen partnership between government and private sector stakeholders to ensure increased access to services (water, energy, transport) and production on the one hand, while developing existing and create new markets to strengthen and expand value-chains on the other.

• Maximise benefit to existing state land with agricultural potential in the provinces, where possible.

• Maximise access to markets to all farmers, with a bias to emerging farmers and rural communities.

• Maximise the use of high value agricultural land (high production capability).

• Maximise use of existing agro-processing, bulk and logistics infrastructure, including having availability of water, energy and roads.

• Support growing-towns and revitalisation of rural towns, in terms of high economic growth, high population growth over past 10 years and promote rural urban linkages.


4. OWNERSHIP AND MANAGEMENT MODEL OF THE AGRIPARKS

4.1. Ownership of the Agriparks Infrastructure

In order to fulfil the objective of serving the wider farming community with specific bias towards integrating smallholder farmers in various commodity value chains, the agripark infrastructure facility will initially be State-owned Agricultural Enterprises (SoAE) with a GDARD identified institute or an entity (e.g. managing agency) in charge of the facility for an agreed period.

Fig 3: Ownership model of Gauteng Agriparks

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The leasing beneficiaries and the smallholder farmers in the surrounding 20km radius linked to the agripark would be assisted through the formation of legal entity to acquire and increase shareholding in the agripark.

A Public Private Partnership (PPP) in the form of a joint venture with the managing agency acting on behalf of the state will be institutionalised where the managing agency is the preferred management option. The project beneficiaries will be capacitated and trained for them to develop their capacity to become fully fledged entrepreneurs. The province would continue to work with the municipalities to assist them in ensuring that the Agriparks infrastructure is utilized for the purpose it was intended for.

4.2. Operation model of the agriparks

Two operations model are to be implemented depending on the circumstances of each agripark and the available resources in GDARD and the partner municipality to support the specific agripark.

The two models are as follows:

• State operated Agriparks where the state executes the operations.

• The Managing Agency operating model. The managing agency may entail any well capacitated, resourced and skilled agri-entrepreneurs along the value chain.

The major functions of the Agriparks as an institutional entity entails:

• Securing and undertaking basic maintenance to the Agriparks facility

• Securing contract markets with private and public institutions

• Facilitate and schedule production which incorporates aligning and sourcing from surrounding farmers within the 20-30km radius


• Facilitating agreements and contracts with surrounding farmers

• Facilitating logistics for aggregation of produce and distribution to the secured markets

• Facilitating disbursements to the farmers

• Facilitate the payment of maintenance and services fees to the municipality

Fig 4: Agriparks mapped with 20km radius, smallholder farmer (blue) and community gardens (yellow)

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GDARD has mapped smallholder farmers, community gardens and school food gardens in the province as indicated in Figure 4 (page14). The mapping was undertaken with the purpose of aligning the smallholder farmers and the community gardens to the nearest agripark. Therefore working with the managing entity, surrounding farmers within the radius of 20 - 30km are to subscribe to a production plan of selected horticultural commodities which have been contracted to be supplied to the secured markets. The surrounding farmers will produce according to the program agreed with the agripark using the outgrower model and their produce will be aggregated according to an agreed plan with the managing agency to the cold storage facilities of the agripark packhouses.

Fig 5: Operating model of the Agriparks showing linkages of smallholder farmers and community gardens to the Agriparks

FORMAL MARKETS

Shared packaging and cold room facilities. Out-grower Model and

On-site production

a

AGRIPARK

a aa

SMALLHOLDER FARMER COMMUNITY GARDENS COMMUNITY GARDENS


4.3. Prioritized horticultural commodities and expected revenue

The aim is to produce High value commodities which may be value-added in order to improve the economic value. Examples of high value vegetables crops to be produced on-site as well as in the premises of the surrounding farmers include tomatoes, cucumber, baby spinach, peppers, baby marrows and many others.

On-site primary production for horticultural products is to take place in a minimum of 20 tunnels of 300m2 as well as in shade-net infrastructure of a minimum of half a hectare (500m2). In order to ensure adequate volumes, open field production will also take place within the premises where the suitable space exists.

PRODUCT QUANTITY PRICE

Tomato 64,800 boxes R 2,397,600.00/year

Green peppers 36,000 boxes R 1,440,000.00/year

Cucumbers 28,800 boxes R 2,304,000.00/year

Lettuce 36,000 boxes R 3,240,000.00/year

Brinjal 11,200 boxes R 672,000.00/year

TOTAL 176,800 boxes R 10,053,600.00/year

Table 1: Estimate revenue per crop commodity per agripark and surrounding farmers

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4.4. Financial Sustainability

The financial sustainability model of the Agri-parks will differ slightly from one agripark to the agripark influenced by various factors which range from nature of infrastructure, quantities produced and number of subscribers to the agripark.

The financial sustainability model would seek to ensure that:

• The agri-parks are stable and develop growing revenue streams for the project beneficiaries.

• That revenue streams entails sales of aggregated primary produce and value added products and use of facilities

• Project beneficiaries will share profit based on their shareholding in the co-operative and they will contribute percentage of the sales proceeds (est. 15%) for the maintenance of the facilities.

• There is an expanding range of capital funding options supported by strong capital finance risk management

• There is a sustained excellence in financial management on the part of the project managing agency or managers of the project co-operatives.


5. DESCRIPTION OF THE INDIVIDUAL AGRIPARKS

5.1. Westonaria Agripark

Bekkersdal Agri Park is located within the Westonaria Local Municipality along the R28 road and is positioned on GPS coordinates S 26.27767 and E 027.68143. The farm is portion 34 of farm Gemspost and covers the surface area of 66 Ha.

There are approximately 27 smallholder farmers surrounding the Agri-park which covers farmers as far as from Simunye, Tarlton, etc. The farmers are based within 20km radius around the Bekkersadal Agri-park.

GDARD has contributed infrastructural, professional or technical expertise and mechanization support. The infrastructure established entails the following:

• A 300m2 hi-tech vertical growing chamber

• 20 hydroponics tunnels covering a total of 6 000m2 (20 tunnel x 300m2 each) for production under protection

• Office space with training room and ablution facilities

• Pack-house with two cold-room facilities

• Boreholes with Irrigation system inside the tunnels

• High security fence covering 1200m

Pack-house, with office block in the surrounding

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5.2. Sebokeng Agripark

The Sebokeng Zone 10 Agri Park is located at 27°50’58”E, 26°35’56”S in Sebokeng Zone 10 location under the Emfuleni Local Municipality in the Sedibeng District Municipality. The agri-park is having two cooperatives namely Harethusaneng Agricultural cooperative focusing on vegetable production and Lemohang Tlala Agricultural Cooperative focusing on herb production. These two cooperatives are having 4 and 15 members respectively. The total size of the area is 4.2 ha, but only 3.16 ha is to be utilized for agricultural purposes.

The Infrastructure established at Sebokeng Agripark entails:

• 20 hydroponics tunnels covering a total of 6 000m2

(20 tunnel x 300m2 each) for production under protection






5.3. Eikenhof Agripark

The farm is the property of Johannesburg Metro Municipality and GPS co-ordinates ranges are as follows: S 26.33688o and E 028 00743o. The farm is part of Portion 41 Groenfontein 526 –Jr Ptn 29 Eikenhof. The farm covers the surface area of about 270 ha and would cater for farmers from areas in Eikenhof, Eldarado Park, Walkerville, De Deur, Elandsfontein, and Meyerton. The above mentioned farmers are based within 20km radius around the Eikenhof Agri-park.

The infrastructure established at Eikenhof Agripark entail:

• 20 hydroponics tunnels covering a total of 6 000m2 (20

tunnel x 300m2 each) for production under protection





Sebokeng Agripark, offices with training room

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5.4. Merafong Agripark

Merafong Flora Agri Park is the initiative of the Gauteng Department of Agriculture & Rural Development in partnership with the West Rand District Municipality and Merafong Local Municipality. The Agri Park is located at Merafong Local Municipality within Ward 18.

There are approximately five GDARD supported farmers within the 20km radius of the Merafong Agri Park. Of the five farmers only one is a food security project and four are supported through Farmer Support programme. These farmers are however, not producing flowers but vegetables. There are plans to extend operations at Merafong Agri Park to including vegetable production.

Merafong Agri Park is not a new establishment but an upgrade of the existing Merafong Flora Project, an initiative of the WRDM. The municipality has already invested the following infrastructure: packhouse, offices, farmhouse, shade nets structures, pump house, power generator, ablution facility and a dining hall. However, most of the infrustrusture has been worn and delipidated and therefore not functional (e.g., pump house, shade nets, coldroom).

There are currently 26 beneficiaries operating the Merafong Flora Agri Park. Of the 26 beneficiaries eight are 8 males and 14 are females. Five beneficiaries are youth. These beneficiaries have been selected through the municiplities and have been operating the project prior to the establishment of the Agri Park.

5.5. The Innovation Hub Agripark

The Gauteng Provincial Government (GPG) has identified agro-processing as a key economic driver for supporting the objectives of job creation through emerging agro-food entrepreneurs as well as optimising the value created along the agri-food supply chain.

The Gauteng Department of Agriculture and Rural Development (GDARD) in partnership with The Innovation Hub Management Company (TIHMC) are establishing an Agri-Park linked to the BioPArk@Gauteng at The Innovation Hub, Pretoria to support agro-processing called The Innovation Hub Agripark.

The Agripark will emphasise more on the training on packaging and advanced processing. The Innovation Hub Agripark is situated at City of Tshwane Region 6, Ward 46 under the leadership of Councillor De Goude. Region 6 is located in the south east of the City. It includes developed urban areas in the north- west and rural areas in the remainder of the region. The Tshwane Fresh Produce Market is located


within the 20km radius of the agri-park with Rooiwal Agri-park in close proximity. The GPS coordinates where the agri-park is located are -25.748378, 28.268850

Aspirant farmers will be trained on hydroponics production focussing on cover system & structure, growth media, crops, fertigation & irrigation, sanitation, scouting, pest & disease management, harvesting & grading, production planning/ planting program and seeding production. Farmers who are aspirant food processors will be trained. The farmers will also be trained on food processing, preservation, food cutting, packing and labelling. The farmers will also be trained on the regulations governing the food processing.

6. CONCLUSION

It is anticipated that Westonaria agripark and all the surrounding agriparks will indeed bring about a systemic change with regard to the meaningful participation of smallholder farmers in the agri-food supply chain. Many institutions, agro-processors and retailers which have cited reasons such as inefficiencies, volumes, consistency of supply, logistics, handling facilities, quality of produce and food safety as a reason not to trade with smallholder farmers will now have an opportunity to source produce from smallholder farmers which meets expected standards through agriparks.

Without market access guarantees through off-take agreements, there is a potential risk of many Agriparks infrastructure becoming white elephants. Agriparks would in a way assist to address the concerns of large agri-food corporations by ensuring consolidation of produce to address volumes and consistency of supply, grading and quality assurance issues.

It is envisaged that contract markets secured through agriparks will ensure that high volumes are produced and satisfy traceability measures. Guaranteed market access would serve to incentivize smallholder farmers to grow to their maximum potential in the agri-food value chain. The Agripark initiative by government is a commendable intervention, it a systemic transformative intervention and it is bound to address economies of scale issues, logistics and handling facilities concerns. The greatest intervention is that farmers have the potential of sharing in the revenue downstream the agricultural value chain.

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7. CONTACTS FOR FURTHER INFORMATION

Gauteng Department of Agriculture and Rural Development

Branch Agriculture

Mr. Motlatjo Makaepea 011 240 2565

Mr. Charles Manyaga 011 240 2719

Layout and design: (GDARD: Communications) - [email protected]


For more information about the AgriParks launch, visit the links below:

www.gdard.tumblr.com

www.facebook.com/Gauteng-Department-of-Agriculture-and-Rural-Development-609291759193128

www.instagram.com/gdard_official/

twitter.com/OfficialGDARD

#GPAgriParks


The Gauteng Department of Agriculture and Rural Development (GDARD)

Tel: 011 240 2500 Fax: 086 420 1000

www.gdard.gpg.gov.za

GAUTENG PROVINCEAGRICULTURE AND RURAL DEVELOPMENTREPUBLIC OF SOUTH AFRICA

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