SA’s biggest consumer foods maker Tiger brands on Friday signed an agreement with the Department of Agriculture, Forestry and Fisheries in which it agreed to buy certain crops from smallholders.
Tiger Brands CEO Peter Matlare said at the signing of the Memorandum of Understanding that the deal would provide business with an increased supply of local raw material and would benefit both the growth of the agriculture sector and rural economy.
He believed the partnership would also help with skills development and poverty alleviation.
“It has the potential not only to raise productivity, enhance food security and promote rural development, but also to create jobs outside of farming in both service and production sectors,” he said.
Matlare said his company would also partner with local communities to establish farming cooperatives as well as providing technical and financial support.
Three year agreement
Acting chief director for food security at DAFF, Dr Jemina Moeng, told Fin24 the technical aspects of the agreement still needed to be finalised and a working group had been established.
“Tiger Brands has indicated that they are procuring 1.9-million tons of agricultural commodities per year, 63% of which is sourced locally,” she said.
Moeng said the company's tonnage of locally sourced commodities was likely to increase.
“The first phase which involves the supply of tomatoes, sorghum, beans and sunflower will begin immediately.”
Moeng described the MoU stage as an overarching agreement in which the first phase would run over three years and reviewed once completed.
The parties were now in the process of signing a service level agreement which will see implementation in the Western Cape, Limpopo, North West and Gauteng Provinces.
DAFF minister Senzeni Zokwana said the Tiger Brands partnership came as the department worked to increase production through the Fetsa Tlala Food Production Initiative, which aimed to increase food accessibility, affordability and availability by putting one-million hectares of under-utilised land under production by the 2018/19 production season.