The Leasehold Programme – a collaborative partnership between the Jobs Fund, communities and sugar miller Tongaat Hulett – is expected to be able to support agricultural development of smallholder farmers.
The 2014 Sugarcane Development Initiative, which is a public-private partnership between Tongaat Hulett, the Jobs Fund and farming communities in three KwaZulu-Natal districts, has resulted in the injection of more than R80-million in rental income to these farming communities.
As such, the continued success of the Leasehold Programme is expected to contribute significantly to government’s economic recovery strategy, post the Covid-19 pandemic, the Jobs Fund said in a statement on May 29.
It explained that smallholder farmers acquire skills through the skills transfer from an implementer, such as Tongaat Hulett, as well as an income from leasing the land and a wage income if he or she also works on the land.
The collaborative partnership includes Tongaat Hulett, as the tenant, managing the full crop production cycle, sourcing local labour, upskilling landowners and ensuring the timeous payment of rentals, the fund explained.
This model has the potential to transform fallow and/or underused land, especially in communal areas, into a productive and income-generating asset, thus creating a greater understanding among communities of the commercial value of land and the opportunity cost of not using available land under their control.
"Given the impact that Covid-19 has had, and will continue to have, on the economy and work, bringing unused community land into agricultural production, is not only essential for the country, but also provides essential livelihoods and skills development to vulnerable communities," the fund stated.
Leasehold models encourage agricultural development in cases where smallholder farmers have access to land but do not have the capacity, knowledge, skills, experience, equipment and infrastructure and/or financial resources, besides others, to start farming and cultivating the land.
"The initiative is designed to synergise Tongaat Hulett’s business imperative of growing its milling capacity with the developmental aspirations of communities who own vast tracks of restituted land through a leasehold agreement spanning over nine years. This partnership has stimulated local economies through rental-related income and wages earned by community members working on the farms," the statement highlighted.
South Africa’s socioeconomic challenges have intensified as the national lockdown continues to negatively impact on the incomes of ordinary citizens across the country, bringing with it a tremendous strain on households and the economy at large.
"The country is in desperate need of effective and proven job creation models to turn things around across key sectors of the economy. The Sugarcane Development Initiative is arguably one of the [best] models incubated by government, through the Jobs Fund, which will prove invaluable in its economic recovery arsenal," said Jobs Fund head Najwah Allie-Edries.
“The job-creation models that government has piloted over the past nine years, through the Jobs Fund, are poised to deliver a good return on investment for the State, as some come to maturity."