News

Silversands community partnership program a roaring success and shining example of how the growing Biofuels industry is stimulating the economy at grassroots level - 26/10/2008

Since their inception in 2005 by a group of entrepreneurial grain famers in the Lichtenburg District of South Africa, the partnership between Silversands and their local community has been growing from strength to strength.

The partnership was borne out of the need for these famers to find alternative ways of deriving additional value from their crops amidst dwindling grain market prices as a result of over supply of stocks in the market place.

During a subsequent study of the local area in the Lichtenburg District it was found that there was still substantial land owned by local communities that was not being utilized at all by those communities. There were a number of reasons for this. Firstly there was a fundamental lack of knowledge of how to unlock value from the land the local land owners lived on. This was further compounded by the fact that there were many individually owned pieces of land which due to their small size made them uneconomical to farm as individual units. I.e. the land although very fertile, lacked the economy of scale to be farmed.

It was found that there were three basic needs for the members of the community over and above the basic need for food. First and foremost was the need to own land. Secondly was the need to generate income and thirdly was the need to generate income from the land.

Bearing in mind the needs of the local community and the need for the farming community to diversify, the idea of an ethanol gel business was hatched. It made no sense for the famers to plant more maize for the food market as there was already a huge surplus driving prices down. However if surplus grain was planted and diverted to the manufacture of ethanol gel a viable business could be sustained to the benefit of all parties involved.

To this end this group of farmers approached the community leaders / elders with a proposal to set up a partnership with the local communities to meet their immediate need for food as well as the three other fundamental needs.

The proposal was well accepted by the land owners. Those that bought into the project being allowed to register with the local grain mill and allowed to draw free of charge a years worth of grain for food. This totalled around 85 land owners each with about 15 hectares of land.

Various other companies such as Pannar, Monsanto, Syngenta and Omnia also came on board to help finance the acquisition of seed, fertilizer and pesticides. The famers provided knowledge, expertise, their time and equipment to prepare the land, plant the maize and eventually harvest it in what is termed a shared crop model.

What this means is that the land owners still owned the land and were in terms of the deal entitled to 12.5% of the harvest. The yield from each unit of land was carefully recorded and proportioned. They could then do what they wanted with their portion of the harvest. They could sell it on the open market or back to the partnership for cash or retain it for food or any combination of the three.

During the day-to-day operations of the farming activities, community members were employed and mentored in the practices of farming and some are becoming full blown farmers. This partnership has now been going for 5 years. The 1st year’s income to the community was R690k and this year is expected to reach One Million Rand. This is in addition to the seasonal and some permanent jobs created by the partnership. It is estimated that one land owner supports 12 other dependants. With 85 participants that’s 1020 individuals whose lives have been positively affected thus far.

This partnership is a shining example of an innovative and co-operative partnership program within the new and exciting Biofuels industry.