The drive creates access, and integrates them into the food supply chain on a greater, productive and more sustainable level.
Kagiso Trust’s Tyala Impact Fund is the only black-owned agricultural fund in South Africa.
The hub programme is a decentralised hub business model that used packhouses as mini-distribution centres in rural areas where fresh food is collected, packaged and distributed to markets.
“Collaborating and leveraging with the Spar programme and FNB is Tyala Impact Fund’s alternative market strategy to focus on small scale farmers,” said Genius Mokgoadi, business and fund manager of socio-economic development at Kagiso Trust.
“On a general level, it is about food security, job creation and uplifting the communities.
“On a more focussed level, it is about improving and shortening value and supply chains to reduce costs to the farmer and the consumer, opening up market access, transferring skills and infrastructure development,” he said.
The Hub operates from the packing facility and cold-room at the village of Ofcolaco, 40km south-east of Tzaneen, which has 27 Spar stores within 200km.
While the local farmers initially supplied low-value vegetables such as cabbage and spinach, which could be sold direct from farmers to local retailers, the financial involvement of Kagiso Trust TIF and FNB has meant the Hub has also begun supplying high-value produce, such as peppers, cocktail tomatoes and cucumbers.
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“Access to funding for small farmers is a major challenge, one which we as the agriculture arm of Kagiso Trust help overcome through collaboration with partners to supply blending financing that takes out the risk for financial institutions.
“Being involved in an existing development programme allows us to bring added value and to enhance the incredible work already being done in the rural hub,” said Mokgoadi.
He further said: “We have agreed and disbursed loans to farmers for input (R1.38-million) and infrastructure (R3.4-million).
“We receive quarterly updates from the Mopani Hub on the progress of the farmers and the first quarter report was encouraging in terms of skills transfer, job creation and infrastructure development.
“Sixty-five permanent and 226 casual jobs were created and maintained in Q1.
There has been a noted increase in skills transfer as the farmers are continuously trained, assessed and supported to produce high value crops using locally and internationally recognised agriculture practice standards through Global Good Agricultural Practices (GAP) and Local GAP accreditation.
These standards govern food safety, which is imperative to have access to formal markets such as Spar.
“Last year, some of the products from the Hub were sold under Spar’s Freshline brand.”
GAP accreditation covers all stages of production, from pre-harvest activities such as soil management and plant protection product application to post-harvest produce handling, packing and storing.
Six farmers successfully completed the audit and received certification in the first quarter.
The consistent production of high-value crops requires investment in the development of infrastructure, which includes nets houses, irrigation systems and boreholes.
TIF has funded six farmers from the Hub to the tune of R3.4-million.
Two farmers had their infrastructure installed in the first quarter, while the others will have theirs installed in the second quarter.
“Overcoming the hurdles to enter value chains both transforms the agriculture sector and empowers smallholder farmers, some of whom have grown to become true commercial farmers,” says Mokgoadi.
“As the farmers grow, so, too, will their communities see their standards of living increase not only from the economic benefits but also from access to nutritional, affordable food.
“The Spar Rural Hub model is one that Kagiso Trust believes is replicable and sustainable, which are the tenets of the development programmes of Kagiso Trust as we seek to eradicate poverty in South Africa.”
