There are considerable opportunities for South Africa’s rural farmers through a diversification strategy that would result in farmer-owned, modern, efficient mills and ethanol distilleries being built in South Africa.

Industry organisation the South African Farmers Development Association (Safda) is pursuing the diversification strategy.

This was indicated during Safda’s Milling and Diversification Multistakeholder session, held on July 15. The session followed a recent visit by the entity to Isgec and Praj, in India, with both of these companies being hailed as leaders in sugar industry milling plants and diversification, manufacturing and technology.

During the visit to India, Safda says its executive team witnessed a comprehensive rural development model being implemented with support from the Indian government.

This included diversified sugar milling and agroprocessing done economically and efficiently in the heart of rural sugarcane farming areas, demystifying a notion about the location of a mill in rural areas not being a viable option, Safda said.  

Therefore, Safda is planning to build and establish these plants at appropriate sizes in a modular approach with a ramp-up to diversified products.

Safda said the move to cane biorefineries is the future for the sugarcane industry producing not only sugar, but also electricity, ethanol, biogas and biochemicals, besides others.

Safda said key findings from the India study tour include that sugarcane value can be maximised by being processed into multiple products, including sugar, electricity, ethanol of multiple grades including fuel ethanol, biogas, bio-fertilizer, and waste streams into power that fuel the plants.

The entity said sugar, electricity and ethanol are standard products produced in almost all mills.

Moreover, the tour also provided insights into how to run efficient and optimised factories that harness the value for the sugarcane, resulting in greater profit that can be shared with the farmers, Safda said.

It noted that the tour showed that sugar milling and biorefining can be done in the heart of rural sugarcane farming areas. Moreover, the tour showcased that mills could be efficient and economical.

The tour also showed that the Indian government is deliberate in supporting the sugarcane industry.

Other key findings from India included the minimisation of distance and transport costs for small-scale farmers; harvested cane being transported to mills crushed within the same day; and small-scale farmers paid within the week – all of which can be applied in South Africa.

Also, Praj business development and sales Africa and the Middle East head Makarand Joshi said India presents the perfect example of what can be achieved in a short span of time, as the country got into the diversification trend late, but still realised proper implementation and success stories in only a few years.

Safda’s diversification approach entails the agricultural source of sugarcane being black small-scale farmers, and for these entities to then be involved in agro-processing on primary, secondary, tertiary and advanced levels.

Safda is pursuing collaboration and partnership with various key stakeholders to mobilise the financing sector for projects that will have significant socioeconomic impact in some impoverished regions of South Africa.

Isgec has indicated the company’s readiness to partner with Safda.

Moreover, the company has put forward two project ideas already for the country, with the first being a small facility with additional components to be added gradually; and the second a bigger facility with all the components included at the beginning.

Further, Joshi said Praj is readily available as a knowledge partner for Safda as it pursues this, with agreements for research and development, and the like, signed during the visit.

Moreover, South Africa’s Department of Agriculture, Land Reform and Rural Development has approved R8-million for the bankable feasibility study (BFS) in Makhathini Flats, Jozini, to explore an opportunity to set up an integrated sugar mill and biorefinery facility in that region, that is aimed at maximising the value of the sugarcane that is produced by the small-scale sugarcane farmers.

Joshi indicated that an integrated sugarcane biorefinery allows for compel valorisation of feedstock; enables rural development and entrepreneurship to bolster the rural economy and creates new markets for agriculture commodities.

Moreover, these enable sustainability through a multi-product facility, reduce carbon footprint and greenhouse-gas emissions, and reduce foreign exchange or import bills, he highlighted.

Joshi said that for this revolution to occur in the country, the onus to change must be undertaken by all stakeholders, including farmers, oil companies, traders and buyers, producers, investors, technology and plant suppliers, advocacy groups and government agencies.

He indicated that a sustainability model must be pursued for the sugarcane industry, owing to challenges including volatility in feedstock, product and energy costs, and uncertainty in policies and regulation.

Moreover, this would also be driven by the pursuit of capital expenditure optimisation and value maximisation, Joshi said.

He highlighted that a sustainable model would engender profitability improvement, returns to farmers, sweating existing assets, and environmental care.

Also inherent to the model is energy and water footprint reduction, feedstock beneficiation, around-the-year operation, and zero liquid discharge, Joshi outlined.