Public-Private Partnerships Transform The Sugar Industry

Numerous sugar cane fields in South Africa have been claimed through land restitution. Were this land to go fallow or be used for other agricultural purposes, the potential loss of sugar production would hold dire consequences for the sugar value chain. Lindi Botha spoke to Dawie van Rooy, director for agriculture at RCL Foods, about his companys response to this risk.

- Lindi Botha

HOW HAS RCL FOODS APPROACHED LAND REFORM?

Malelane is one of South Africa’s largest sugar cane-producing areas, and the number of land claims instituted in this area in the late 1990s had the potential to cripple the sugar industry. This would have resulted in the loss of thousands of jobs in the area.

But RCL Foods saw land restitution as an opportunity to build better communities and create an exemplary model in which land claimants and private companies could work side by side to maintain a sustainable industry and enrich the lives of all involved.

HOW DID YOU GO ABOUT STRUCTURING THE PARTNERSHIPS WITH LAND CLAIMANTS?

When the land claims were granted, we sat with the land claim commissioner at the time and created a model to facilitate future production on land claim farms through partnerships with the new owners. The three pillars of the model rested on optimising operations, putting a sustainable partnership or an operational company in place, and benefitting local communities.

We were blessed to have a really good commissioner who understood and supported the whole process. This made all the difference in our situation. He understood that if the process were not successful, we could have lost one of the mills. There are many opportunities to work with government if the right people are in the right positions. Together, we sat with the community property associations (CPAs) and created joint ventures between us and them in which each party has a 50% ownership while the farmland is leased from the CPA. This gives the community the double benefit of receiving a monthly income from the rental of the land and dividends from the joint company.