Empowerment farm drowns in debt

What started as a dream come true has turned into a massive disappointment for a farmer and his workers on a vineyard in the Orange River Region.

- Glenneis Kriel

Near the Augrabies Falls in the Northern Cape lies one of the biggest empowerment initiatives in South Africa: a vineyard consisting of 67ha under wine grapes and 30ha under dried grapes (raisins), in which a farmworker trust, consisting of 14 farmworkers, own a 54% stake.

With such economies of scale, this should be one of the most successful empowerment initiatives in the country. But it’s not. Fritz Oosthuizen, who used to own the land, says the project is drowning in debt, and he and the beneficiaries have lost faith in it.

What went wrong? Oosthuizen explains that he initiated the project in 2008, because he wanted to downscale production.

“I always dreamt of giving something substantial back to my workers for their contribution to the success of my farming business.

“Government was supporting many farmworker empowerment initiatives at the time, so I decided to explore the opportunity of developing a unique black economic empowerment initiative for the wine industry.”

To this end, Oosthuizen ceded more than a quarter of his land to the Augrabies Falls Empowerment Trust, which represented 74 of his farmworkers at the time, and started applying for various empowerment grants to get the initiative off the ground.

The Department of Water and Sanitation finally awarded water rights to the trust for 100ha in 2011, and subsidised the construction of a 400m-long water pipe to the farm at a cost of R1,2 million.

A precondition, however, was that the water licence had to be used within five years after it was granted.