Harvesting the big micro-opportunity

ONE of South Africa's biggest enterprise development opportunities lies under our feet: not in manufacturing, courier services or office cleaning, but in the land. The basic asset - the ground - does not have to be funded, fabricated or imported. It's there, looking at us.

ONE of South Africa's biggest enterprise development opportunities lies under our feet: not in manufacturing, courier services or office cleaning, but in the land. The basic asset - the ground - does not have to be funded, fabricated or imported. It's there, looking at us.

Unfortunately, the asset does not look in the best of shape at the moment. Any trip into rural areas will reveal that more and more agricultural land is unproductive, undercultivated or overgrown. The challenge is how to reverse this trend and assure greater use of an underperforming asset. The asset management challenge does not face policymakers alone. It also has to be addressed by the private sector and, more specifically, agribusiness.

Uncultivated land represents a sizeable commercial opportunity and self-interest suggests this will ultimately be grasped, although the pace and scale will have to pick up if jobs are to be created and lives transformed any time soon.

Some promising initiatives are already under way where it counts - in and around severely disadvantaged rural communities.

More businesses now include support for start-up farmers in their corporate social investment budgets.

In recent years, an empowerment player like the Mineworkers Investment Company has established a number of pilot projects in rural areas that have traditionally supplied labour to the mines. These projects confirm that small-scale commercial farming has the potential to incubate jobs and entrepreneurs while establishing the basis for the sustainable development of small businesses.

For their part, retail groups like Shoprite have set up small commercial grower programmes that aggregate the production of several start-up farmers, ensuring the scale necessary for commercial operations. Selected growers are integrated into the formal supply chain, creating the sort of certainty that permits incremental expansion and job creation. Quality controls and grower education contribute to acceptable - even superior - product quality.

Large commercial producers are also engaged in enterprise development to assist small- and medium-scale growers and service providers.

All these efforts are laudable. However, the overriding impression remains that there is massive scope for using uncultivated ground.

This is not a "soft" corporate social investment issue. It is absolutely essential if food security is to be achieved not only for local communities, but for the nation.

Well-established, large-scale agri-business is perhaps best placed to take advantage of the opportunity under our feet. Like the rest of the private sector, these businesses will have to place growing emphasis on enterprise development if they are to satisfy the requirements of new empowerment codes scheduled for implementation in April 2015.

It is presumably in these larger businesses' best interests to focus on micro-farming and start-up service providers in the farming sector. Supply chain development - at grassroots level - will help big, successful agribusiness to grow their market and bolster their own bottom line.

The Shoprite precedent shows that it is possible to aggregate dozens of small plots into a viable link in the supply chain. As these start-up businesses take root, they look for supplies of their own, such as seedlings for planting.

At the moment, rudimentary nurseries at community level face a quality challenge. Prices may be low, but so are the potential crop yields if seedlings are diseased or unsuitable. Community growers and nurseries require market education in product quality and how to make optimum decisions about the price of inputs and the likely commercial return when the crop comes in.

Market education in quality issues represents a huge opportunity for established agri-industry players to evangelise their brands. Big agri-businesses not only have substantial scale, but they also have a reputation for delivering superior quality seedlings and other inputs. The more these companies educate the new generation of community-based farmers, the more they grow their own customer base and future sales.

Training investment for start-up entrepreneurs becomes a form of investment in long-term market growth. Enterprise development simultaneously secures the empowerment status of these companies.

The opportunity is at a microlevel, but the potential benefits to the macroeconomy are huge. We grow jobs. We build the tax base. We cut the import bill by growing more of our own food. Expansion from subsistence to commercial farming also means that small-scale farmers may eventually become food exporters.

Agribusiness and others focused on rural development will make a huge national contribution by focusing on micro-farming initiatives on a much greater scale. We not only stand before a great opportunity, we are standing on a great opportunity.

Fuchs is senior investment and special projects manager at the Mineworkers Investment Company